3/1/08 Equities Continue Their Meltdown
According to AMG Data, including ETF activity, Equity funds report net cash inflows totaling $2.049 billion in the week ended 2/27/08 with Domestic funds reporting net inflows of $1.839 billion and Non-domestic funds reporting net inflows of $210 million; Excluding ETF activity, Equity funds report net cash inflows totaling $217 million with Domestic funds reporting net outflows of -$105 million and Non-domestic funds reporting net inflows totaling $322 million.
Bond insurer Assured Guaranty Ltd said on Friday billionaire investor Wilbur Ross agreed to buy up to $1 billion of its shares, giving it a much needed capital boost to preserve its triple A credit rating. Under the agreement, WL Ross & Co LLC will purchase $250 million of common shares of Assured and to provide a commitment to purchase up to $750 million of additional common shares of Assured at the option of the company
Bain Capital LLC and China's Huawei Co. plan to resubmit an application seeking U.S. approval for their planned $2.2 billion buyout of 3Com Corp. within the next several weeks, according to people familiar with the matter.
"There will probably be some bank failures," the Fed chairman told the Senate banking committee in his second day of biannual testimony to Congress. He said the banks at risk were "small and in many cases de novo [new] banks that are heavily invested in real estate in localities where prices have fallen".
According to the NY Times, Canadian Imperial Bank of Commerce reported a first-quarter loss of 1.46 billion Canadian dollars ($1.49 billion) on Thursday, compared to a profit of 770 million Canadian dollars a year earlier, as the bank took a slew of charges related to its subprime mortgage exposure.The write-downs and paper losses included a 2.28 billion Canadian dollar (pre-tax) charge because of the bank’s exposure to troubled bond insurer ACA Financial Guaranty; a 626 million Canadian dollar charge on exposure to other financial guarantors; 473 million Canadian dollars of paper losses on securities tied to the U.S. mortgage market; and a 108 million Canadian dollar loss on the sale of some of the bank’s U.S. business to Oppenheimer Holdings as well as management changes and the restructuring of some other businesses.
Reuters writes that Microsoft has cut the price of Vista to encourage upgrades.
Microsoft is cutting prices on some retail versions of Windows Vista in a bid to stoke demand for the company's flagship operating system ahead of a significant upgrade. The price cuts vary by market but in general will range from 20 to 40 percent. In the U.S., an upgrade from earlier versions of Windows to Vista Home Premium will cost $130, compared with the current $160. A full version of the top-end Vista Ultimate edition will sell for $320, down from $400.
S&P's Sam Stovall points out that, in the final quarter of 2007, earnings per share in the S&P 1500 fell by close to 4%.
Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of sub-prime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report.
Bloomberg reports Ohio has the sixth-largest gay and lesbian population in the U.S. Both Clinton and Obama oppose same-sex marriages while supporting civil unions. A major difference between the candidates is that Obama supports full repeal of the 1996 Defense of Marriage Act, a law signed by Bill Clinton -- under pressure from a Republican-dominated Congress -- that prohibits federal recognition of same-sex marriages and permits states to do the same. Hillary Clinton wants to roll back only part of the law.
Swiss Reinsurance Co. reported an 87 percent drop in fourth-quarter net profit on Friday, blaming massive write-downs linked to bad loans.
According to a Reuters/C-SPAN/Houston Chronicle poll released on Friday, Obama has a 6-point edge on Clinton in Texas, 48 percent to 42 percent. He trails Clinton 44 percent to 42 percent in Ohio -- well within the poll's margin of error of 3.8 percentage points.
The Washington Post’s E. J. Dionne takes a look at the similarities between Obama and Ronald Reagan. Both were criticized by opposing campaigns that charged that the candidates had nothing more than oratory skills. Both faced concerns about their ability to handle foreign policy. Both endured complaints that they wouldn’t achieve bipartisanship - Obama will reveal himself as a “big, bad liberal” and Reagan as a right-wing extremist. But the electorate wanted a change in 1980 and they took a risk to achieve it. And they’re doing it again this year. “Now is the time to go for broke, to challenge not only the ruling party but also the governing ideas of the previous political era and the political coalition that allowed them to dominate public life,” Dionne writes.
On Feb. 22, Obama was endorsed by the Change to Win Coalition, many of whose seven constituent members have significant Latino participation. These developments—along with the momentum his 11 consecutive wins since Super Tuesday provides—could help Obama score victories in Texas and Ohio. It is quite conceivable that Latino voters will comprise more than 25% of the voters in the primary and caucus in Texas.
The Commerce Department reported that January personal spending rose by 0.4 percent, while personal income rose by 0.3 percent. The personal consumption expenditure price index, a key measure of inflation, rose 0.4 percent in January after an upwardly revised increase of 0.3 percent in December. In sum, spending posted a 0.4 percent rise in January, and all of that gain came from a surge in inflation during the month. Taking away the effect of prices, spending showed no gain in January or December.
Defaults on privately insured U.S. mortgages rose 31 percent in January from the same period a year earlier, the 13th straight monthly increase, an industry report today showed.
Almost 200,000 newly constructed single-family homes are sitting empty in the U.S., the most since Commerce Department statistics began in 1973. Partially completed developments reduce revenue for cities and towns and hurt businesses, said Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies. Rising foreclosures and falling property values may cut tax revenue by more than $6.6 billion for 10 states, including New York, California and Florida, the U.S. Conference of Mayors said in a report.
The New York Times Co. said Friday its advertising revenue for January fell 9.8% to just under $165 million.
The Reuters/University of Michigan survey of U.S. consumer sentiment dropped to 70.8 in February from 78.4 in January.
Jim Rogers: America is “completely out of control” and there will be a 20-year bull market in commodities and that prices will be in turmoil. He also warned that it “made sense” if global competition for resources ended in armed conflict.
Hezbollah on Friday denounced the deployment of U.S. warships off the coast of Lebanon, calling it a threat to the country's sovereignty, but the Shiite militant group said it would not be intimidated by the move. "We are facing an American threat against Lebanon," Hezbollah legislator Hassan Fadlallah said on local television. "It is clear this threat and intimidation will not affect us."
The dollar fell to a three-year low against the yen on Friday after a weaker than expected reading of a U.S. Midwest business activity index.
Bill Gross, chief investment officer of Pacific Investment Management Co., is planning to invest in municipal bonds and mortgage loans, he told reporters at the Allianz Global Investors annual press conference in London today. There's value in ``assets that are regurgitated into the market place at prices that are more attractive than we have seen in decades,'' Gross said via video link from Newport Beach, California. ``We're moving into assets that have been unwound and sold without discretion. There are tremendous hedge-fund unwinds of municipal securities.''
When Hillary Clinton was ahead by 20 points in the polls in Texas, she had no problem with the Texas voting rules. Now that she's 6 points behind in the latest poll, she is thinking of challenging the Texas voting rules. Soon she will drop out of the race and the thoughts of coronation will come to a halt.
Bill Bonner: "In the United States, as we keep pointing out, the supply of paper money is rising three times the speed of GDP growth. In places like Russia…it is growing five or six times as fast as GDP. China's inflation is at an 11-year high…and at more than 7% is becoming alarming. Don't expect Chinese exports to hold down prices in the United States anymore…now they're just another inflationary pressure."
Gary Dorsch: "For the Bernanke Fed, the devil of hyper-inflation is preferable to the specter of a bear market for the Dow Jones Industrials and weaker home prices. Exercising the “Bernanke Put” means the Fed will slash the federal funds rate further below the US inflation rate next month. But that’s a frightening prospect for foreign holders of $2.3 trillion of US Treasury debt, who must contend with negative interest rates, which in turn, could severely weaken their US dollar denominated investments."
April gold ends up $7.50 at $975 an ounce on Nymex. Crude oil for April delivery fell 75 cents, or 0.7%, to settle at $101.84 a barrel on the New York Mercantile Exchange.
Northrop Grumman Corp. received a contract to replace the U.S. Air Force's KC-135 tankers with the KC-45A aerial refueling tanker. The KC-45A is based on the Airbus A330 commercial jet, which is produced by EADS. The contract has an estimated value of $40 billion. Northrop beat out Boeing Co for the bid.
Berkshire Hathaway said late Friday that fourth-quarter net income came in at $2.95 billion, or $1,904 per class A share, down 18% from a year earlier when the insurance-focused conglomerate made $3.58 billion, or $2,323 per class A share.
J.P. Morgan Chase is reclassifying $4.9 billion of leveraged loans on its books as investments, rather than as held for sale, as the market for loans made to firms doing corporate buyouts weakens further. "While some leveraged finance loans were sold during the fourth quarter of 2007, the firm held $26.4 billion of leveraged loans and unfunded commitments as held-for-sale as of December 31, 2007. Markdowns in excess of 6% have been taken on the leveraged lending positions as of year-end 2007," J.P. Morgan said in a 10k filing with the SEC. "In January 2008, the firm decided, based on its view of potential relative returns, to retain for investment $4.9 billion of the leveraged lending portfolio that had been previously held-for-sale." The bank, the nation's largest, said it expects further declines in the leveraged loan market in 2008.
Wells Fargo & Co. took a $39 million loss in 2007 on debt held in one of its structured investment vehicles. It outlined the loss in an annual report filed with the U.S. Securities and Exchange Commission. Wells said the loss came as part of a $130 million capital support agreement Wells entered into as a way to safeguard a coveted Triple-A credit rating for many of its investment funds.
Saturday, March 01, 2008
Friday, February 29, 2008
Mortgage Market Conditions
2/29/08 Mortgage Market Conditions
Sprint Nextel , the No. 3 U.S. mobile service, on Thursday posted a quarterly loss on a steep impairment charge, and forecast a deepening of subscriber losses in the first quarter.
Sears Holdings Corp reported a 47.5 percent decline in quarterly profit on Thursday on increased markdowns and lower sales at its Kmart and Sears stores.
Freddie Mac says its loss widened to $2.5 billion in the fourth quarter as defaults mounted on home mortgages.
Technical problems have forced the Bush administration to retool a high-tech "virtual fence" along the US-Mexico border and will delay the first phase for at least three years, the Washington Post reported on Thursday.
Apple COO Cook said the company is on track to sell 10 million iPhones in 2008.
Jim Rogers: ``If I told you how bullish I am about agriculture, you'd ask me to leave the room. Prices of agricultural commodities are going to explode. Inventories of food are the lowest they've been in over 40 years. The number of hectares devoted to wheat farming has been declining for over 30 years.''
``All of you should get all the sugar you can. The price of sugar is going to explode.''
``I'm bullish on cotton and have been for a while. A lot of people in the textile business are starting to convert from synthetics to natural fibers again because it's so much cheaper'' given the rise in prices for oil used to make synthetic fibers.
On prospects for the Japanese yen:
``I own the yen and it's another thing I'm buying these days. I'm convinced the carry-trade is going to reverse and when it does the yen is going to go through the roof.''
JPMorgan Chase & Co., the third- biggest U.S. bank, had its earnings estimates cut by Goldman Sachs Group Inc. and Merrill Lynch & Co. on expectations of write downs in the value of its home-equity loans.
El Paso Corp., the largest transporter of natural gas in North America, presented plans Wednesday for a pipeline that will carry natural gas from producers in the Rocky Mountains to the high demand market of northern California. The company laid out the $2 billion Ruby Pipeline project at a Wyoming House Minerals, Business, and Economic Development Committee meeting.
Barclays Capital, the U.K. bank's investment banking unit, raised its forecast for the average price of crude oil in 2008 by 12 percent because of increasing Chinese demand and an improving U.S. economy. The price of West Texas Intermediate, the physical grade for oil futures traded on the New York Mercantile Exchange, will average $97.70 a barrel this year, Barclays analysts including Paul Horsnell said in a report dated yesterday. That's higher than their earlier prediction of $87.40. Brent crude in London, will average $96.40 during 2008, up from $85.80.
Rob Hanna: "As you can see, a Nasdaq lagging as badly as it is right now has been quite bearish historically. The bearish tendency carries through over a significant period of time as well (10 weeks.) If the Nasdaq could begin to assert a leadership role, that could help the current rally attempt greatly. If not, bulls better hope it’s different this time."
First-time claims for state unemployment benefits rose 19,000 to 373,000 in the week ended Feb. 23, reaching the highest level since late January, the Labor Department reported Thursday. The four-week average of initial claims fell 1,250 to 360,500. Recipients of state jobless benefits rose 21,000 to 2.81 million in the week ended Feb. 16. The four-week moving average of continuing claims rose 24,250 to 2.78 million.
Thornburg Mortgage Inc. in a regulatory filing Thursday said since Feb. 14, it has met margin calls in excess of $300 million related to securities backed by about $2.9 billion of mortgage debt. The company said there was "once again a sudden adverse change in mortgage market conditions." Thornburg said it has not realized any losses on the mortgage securities, but it has "observed deterioration in the liquidity for these securities and increased difficulty in obtaining market prices." Market valuations on the securities have decreased between 10% and 15% since the end of January, which triggered the margin calls on the collateral. "In the event that we cannot meet future margin calls from our available cash position, we might need to selectively sell assets in order to raise cash," Thornburg said. "To date, no such sales have been required to meet margin calls."
George Ure: "Monetary inflation around 4% and GDP up 0.6% annualized? Sounds like a recession to me."
Rowan's offshore rig utilization was 97% during the fourth quarter, up from 81% in the year-ago period and down slightly from the 99% level in the third quarter. Rowan's average offshore day rate was $164,300 during the fourth quarter, up by $19,900 or 14% from the fourth quarter of 2006 and by $6,100 or 4% from the third quarter. "Our backlog of business, which currently approaches $2.5 billion, together with our aggressive strategic growth plan, suggest that even better times are ahead for Rowan," the company said.
The dollar index, which measures the greenback against a basket of six major currencies, was at 73.74, down from 74.540 in late U.S. trading Wednesday.
Salesforce.com reported a 14-fold increase in fourth-quarter profit as more companies subscribed to its sales programs and created online applications. The company boosted its fiscal 2009 revenue forecast.
Gannett Co., the nation's largest newspaper publisher, said Thursday that January operating revenue dropped 7.5 percent on sharp declines in real estate and employment ad sales.
U.S. natural gas inventories down 151 Bcf last week. Stockpiles were 133 billion cubic feet less than last year at this time and 87 billion cubic feet above the five-year average of 1,532 billion cubic feet, EIA said. On the New York Mercantile Exchange, April natural gas futures soared 25.4 cents to $9.314 per million British thermal units.
Bernanke sees some bank failures, but not larger firms.
The euro is trading above the $1.52 level.
The Japanese yen rose to a near three-year high against the U.S. dollar Friday, following comments Thursday from U.S. Federal Reserve Chairman Ben Bernanke which were interpreted as signaling intentions to reduce benchmark lending rates to support the flagging U.S. economy. In Tokyo trading Friday the dollar fell to 104.28 yen, its weakest level since May 2005, before recovering to 104.39 yen in late afternoon trade in east Asia business hours.
India's economy expanded 8.4% during the October-December period from a year ago, easing from an 8.9% expansion in the previous quarter, official data showed Friday.
Crude oil futures hit a record high above $103 per barrel in electronic trading Friday amid reports Ecuador's state-run oil company, Petroecuador, suspended operations at a key export pipeline after a landslide damaged infrastructure.
Fremont General Corp. plans to delay interest payments on some of the debt issued by a trust unit as the lender struggles to recover from subprime mortgage problems last year. The payments will be deferred on Fremont's junior subordinated debentures and related 9% trust originated preferred securities, the company said. Fremont "has significant liquidity risk as a result of limited sources of cash available to satisfy its obligations," the company explained. It's now working with its investment-banking advisors Credit Suisse and Sandler O'Neill to explore strategic alternatives including raising capital, restructuring debt and the possible sale of the company, Fremont added.
American International Group reported a $5.29 billion fourth-quarter net loss late Thursday after the insurance giant took a big charge related to the estimated market value of credit derivatives. The net loss was $5.29 billion, or $2.08 a share, vs. net income of $3.44 billion, or $1.31 a share, a year earlier, the company said. The adjusted net loss for the fourth quarter of 2007 was $3.20 billion, or $1.25 a share.
Kohl's Corp. reported net income of $411.7 million, or $1.31 a share, compared with $484.6 million, or $1.48 a share, for the same period a year ago.
Dell Inc. reported a fourth-quarter profit of $679 million, or 31 cents a share, on revenue of $16 billion. During the year-ago period, Dell earned $726 million, or 32 cents a share, on $14.47 billion in revenue.
Gold for April delivery hit a record $970 an ounce on the New York Mercantile Exchange. The contract rose $6.50 to end at $967.50 an ounce.
The chief executive of U.S. Airways said Thursday the industry is facing a downturn as it grapples with record-high oil prices and a weaker economy, Reuters reported.
Sprint Nextel , the No. 3 U.S. mobile service, on Thursday posted a quarterly loss on a steep impairment charge, and forecast a deepening of subscriber losses in the first quarter.
Sears Holdings Corp reported a 47.5 percent decline in quarterly profit on Thursday on increased markdowns and lower sales at its Kmart and Sears stores.
Freddie Mac says its loss widened to $2.5 billion in the fourth quarter as defaults mounted on home mortgages.
Technical problems have forced the Bush administration to retool a high-tech "virtual fence" along the US-Mexico border and will delay the first phase for at least three years, the Washington Post reported on Thursday.
Apple COO Cook said the company is on track to sell 10 million iPhones in 2008.
Jim Rogers: ``If I told you how bullish I am about agriculture, you'd ask me to leave the room. Prices of agricultural commodities are going to explode. Inventories of food are the lowest they've been in over 40 years. The number of hectares devoted to wheat farming has been declining for over 30 years.''
``All of you should get all the sugar you can. The price of sugar is going to explode.''
``I'm bullish on cotton and have been for a while. A lot of people in the textile business are starting to convert from synthetics to natural fibers again because it's so much cheaper'' given the rise in prices for oil used to make synthetic fibers.
On prospects for the Japanese yen:
``I own the yen and it's another thing I'm buying these days. I'm convinced the carry-trade is going to reverse and when it does the yen is going to go through the roof.''
JPMorgan Chase & Co., the third- biggest U.S. bank, had its earnings estimates cut by Goldman Sachs Group Inc. and Merrill Lynch & Co. on expectations of write downs in the value of its home-equity loans.
El Paso Corp., the largest transporter of natural gas in North America, presented plans Wednesday for a pipeline that will carry natural gas from producers in the Rocky Mountains to the high demand market of northern California. The company laid out the $2 billion Ruby Pipeline project at a Wyoming House Minerals, Business, and Economic Development Committee meeting.
Barclays Capital, the U.K. bank's investment banking unit, raised its forecast for the average price of crude oil in 2008 by 12 percent because of increasing Chinese demand and an improving U.S. economy. The price of West Texas Intermediate, the physical grade for oil futures traded on the New York Mercantile Exchange, will average $97.70 a barrel this year, Barclays analysts including Paul Horsnell said in a report dated yesterday. That's higher than their earlier prediction of $87.40. Brent crude in London, will average $96.40 during 2008, up from $85.80.
Rob Hanna: "As you can see, a Nasdaq lagging as badly as it is right now has been quite bearish historically. The bearish tendency carries through over a significant period of time as well (10 weeks.) If the Nasdaq could begin to assert a leadership role, that could help the current rally attempt greatly. If not, bulls better hope it’s different this time."
First-time claims for state unemployment benefits rose 19,000 to 373,000 in the week ended Feb. 23, reaching the highest level since late January, the Labor Department reported Thursday. The four-week average of initial claims fell 1,250 to 360,500. Recipients of state jobless benefits rose 21,000 to 2.81 million in the week ended Feb. 16. The four-week moving average of continuing claims rose 24,250 to 2.78 million.
Thornburg Mortgage Inc. in a regulatory filing Thursday said since Feb. 14, it has met margin calls in excess of $300 million related to securities backed by about $2.9 billion of mortgage debt. The company said there was "once again a sudden adverse change in mortgage market conditions." Thornburg said it has not realized any losses on the mortgage securities, but it has "observed deterioration in the liquidity for these securities and increased difficulty in obtaining market prices." Market valuations on the securities have decreased between 10% and 15% since the end of January, which triggered the margin calls on the collateral. "In the event that we cannot meet future margin calls from our available cash position, we might need to selectively sell assets in order to raise cash," Thornburg said. "To date, no such sales have been required to meet margin calls."
George Ure: "Monetary inflation around 4% and GDP up 0.6% annualized? Sounds like a recession to me."
Rowan's offshore rig utilization was 97% during the fourth quarter, up from 81% in the year-ago period and down slightly from the 99% level in the third quarter. Rowan's average offshore day rate was $164,300 during the fourth quarter, up by $19,900 or 14% from the fourth quarter of 2006 and by $6,100 or 4% from the third quarter. "Our backlog of business, which currently approaches $2.5 billion, together with our aggressive strategic growth plan, suggest that even better times are ahead for Rowan," the company said.
The dollar index, which measures the greenback against a basket of six major currencies, was at 73.74, down from 74.540 in late U.S. trading Wednesday.
Salesforce.com reported a 14-fold increase in fourth-quarter profit as more companies subscribed to its sales programs and created online applications. The company boosted its fiscal 2009 revenue forecast.
Gannett Co., the nation's largest newspaper publisher, said Thursday that January operating revenue dropped 7.5 percent on sharp declines in real estate and employment ad sales.
U.S. natural gas inventories down 151 Bcf last week. Stockpiles were 133 billion cubic feet less than last year at this time and 87 billion cubic feet above the five-year average of 1,532 billion cubic feet, EIA said. On the New York Mercantile Exchange, April natural gas futures soared 25.4 cents to $9.314 per million British thermal units.
Bernanke sees some bank failures, but not larger firms.
The euro is trading above the $1.52 level.
The Japanese yen rose to a near three-year high against the U.S. dollar Friday, following comments Thursday from U.S. Federal Reserve Chairman Ben Bernanke which were interpreted as signaling intentions to reduce benchmark lending rates to support the flagging U.S. economy. In Tokyo trading Friday the dollar fell to 104.28 yen, its weakest level since May 2005, before recovering to 104.39 yen in late afternoon trade in east Asia business hours.
India's economy expanded 8.4% during the October-December period from a year ago, easing from an 8.9% expansion in the previous quarter, official data showed Friday.
Crude oil futures hit a record high above $103 per barrel in electronic trading Friday amid reports Ecuador's state-run oil company, Petroecuador, suspended operations at a key export pipeline after a landslide damaged infrastructure.
Fremont General Corp. plans to delay interest payments on some of the debt issued by a trust unit as the lender struggles to recover from subprime mortgage problems last year. The payments will be deferred on Fremont's junior subordinated debentures and related 9% trust originated preferred securities, the company said. Fremont "has significant liquidity risk as a result of limited sources of cash available to satisfy its obligations," the company explained. It's now working with its investment-banking advisors Credit Suisse and Sandler O'Neill to explore strategic alternatives including raising capital, restructuring debt and the possible sale of the company, Fremont added.
American International Group reported a $5.29 billion fourth-quarter net loss late Thursday after the insurance giant took a big charge related to the estimated market value of credit derivatives. The net loss was $5.29 billion, or $2.08 a share, vs. net income of $3.44 billion, or $1.31 a share, a year earlier, the company said. The adjusted net loss for the fourth quarter of 2007 was $3.20 billion, or $1.25 a share.
Kohl's Corp. reported net income of $411.7 million, or $1.31 a share, compared with $484.6 million, or $1.48 a share, for the same period a year ago.
Dell Inc. reported a fourth-quarter profit of $679 million, or 31 cents a share, on revenue of $16 billion. During the year-ago period, Dell earned $726 million, or 32 cents a share, on $14.47 billion in revenue.
Gold for April delivery hit a record $970 an ounce on the New York Mercantile Exchange. The contract rose $6.50 to end at $967.50 an ounce.
The chief executive of U.S. Airways said Thursday the industry is facing a downturn as it grapples with record-high oil prices and a weaker economy, Reuters reported.
Thursday, February 28, 2008
Durable Goods
2/28/29 Durable Goods
Luxury home builder Toll Brothers said it posted a fiscal first-quarter to Jan. 31 loss of $96 million, or 61 cents a share, after $153.3 million in write-downs. It earned $54.3 million, or 33 cents a share, in the year-ago quarter. Revenue dropped 23% to $842.9 million, and its backlog fell 42% to $2.4 billion. Excluding write-offs, it would've earned 35 cents a share during the quarter. The company is seeing "glimmers of hope" in the Naples, Fla. area and suburban Washington D.C.
The euro remained above the $1.51 level Wednesday morning, after the U.S. dollar set a new all-time low versus the single currency on fears the U.S. economy may be headed toward recession.
Gold futures hit a new record high in electronic trading on Wednesday, up as high as $961.30 an ounce, and recently up $11.50 to $960.40 an ounce.
Demand for durable goods fell back in January after a burst of orders in December, the Commerce Department reported Wednesday, another sign that the economy is slowing. New orders for durable goods fell 5.3% in January, close to the 5.1% drop anticipated by economists surveyed by MarketWatch. December's gains were revised lower to 4.4% from 5% previously reported. Much of the decline in January was due to the unwinding of the flood of orders for aircraft in December. Declining demand was seen in almost every industry in January, however, despite reports of higher exports.
New Zealand business confidence slipped to 10-month low in February, deteriorating sharply from the previous poll in December, as firms grew more pessimistic about the outlook amid weaker economic conditions, according to a survey released Wednesday.
Hong Kong lowers 2008 GDP estimate to 4% to 5%.
In early Wednesday trading, crude hit a record $102.
The European Commission fined Microsoft a record $1.35 billion for failing to comply with a 2004 antitrust ruling.
The monthly RealtyTrac.com survey of foreclosure activity nationwide showed that filings in Idaho jumped from 382 in January 2007 to 735 last month, an increase of 92 percent.
According to the SF Chronicle, there have been more large, environmentally damaging sewage spills in the San Francisco Bay Area in the first two months of 2008 than in the last 7 1/2 months of last year, a Chronicle analysis has found.The flood of effluent continued over the weekend when two spills in Marin County dumped thousands of gallons of sewage into San Francisco Bay and an adjoining waterway. There have been 276 sewage spills this year that either flowed into Bay Area waterways or contained at least 1,000 gallons of effluent, according to the analysis of State Water Resources Control Board statistics.That's more than 14 million gallons of sludge oozing out into the environment, the statistics show. That doesn't even include the Jan. 26 and Jan. 31 spills of 5.15 million gallons of raw and partially treated sewage by the Sewerage Agency of Southern Marin treatment plant in Mill Valley.
Brett Steenbarger: "My Cumulative Demand Supply Index hit an overbought level Tues, which has led to subnormal returns 20 days out."
According to the Seattle Times, Microsoft is celebrating the release of a new version of one of its most successful products outside of the desktop Windows and Office one-two punch. Windows Server 2008, which is being feted in a series of launch events starting in Los Angeles today, is the flagship product of Microsoft's long-term effort to build a presence in the lucrative market for software that businesses run behind the scenes. The part of the company that built the product, the Server and Tools unit, brought in sales of about $11.2 billion in the past fiscal year, more than one-fifth of Microsoft's total. It was very profitable, too, forming the third leg of the stool with Windows and Office.
Nouriel Roubini Says U.S. Recession May Last Up to Six Quarters.
Fannie Mae posted a $3.55 billion loss in the fourth quarter as the failure of homeowners to keep up with their mortgage payments dragged down the value of the company's assets. The net loss was $3.80 share, compared with profit of $604 million, or 49 cents, a year earlier, Washington-based Fannie Mae said in a statement today. Excluding some items, the per-share loss was $3.79, compared with the $1.20 average estimate of 12 analysts in a Bloomberg survey.
BMW said it is cutting 5,600 jobs, including full-time and temporary workers by the end of the year. Another 2,500 workers have already left the company. That brings the total number of jobs affected to 8,100.
The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. Can you say a run on the banks?
Shares of Intel Corp. after JPMorgan cut its profit estimates for the world's largest chipmaker. JPMorgan analyst Christopher Danely said his checks indicate that Intel's first quarter is "trending below plan due to weaker than expected orders for microprocessors."
Nortel will cut 2100 jobs.
Allstate Corp. authorized a $2 billion share repurchase and increased its quarterly dividend 7.9 percent.
Sales of new U.S. homes fell by 2.8% in January, led by a drop of more than 10% in the Northeast, the Commerce Department reported Wednesday. Sales of new homes fell 2.8% to a seasonally adjusted annual rate of 588,000 in January. January's sales pace was down 33.9% compared with January 2007. December's sales pace for new homes was revised to 605,000, up slightly from the 604,000 reported earlier.
U.S. crude inventories rose more than expected, up 3.2 million barrels to 308.5 million barrels in the week ending Feb. 22, U.S. Energy Information Administration reported on Wednesday. Gasoline supplies rose by 2.3 million barrels in the latest week, while distillate stocks fell by 2.5 million barrels, EIA reported. By comparison, U.S. crude inventories fell by 1.7 million barrels to 307.3 million barrels in the week ending Feb. 22, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 1.2 million barrels to 121.7 million barrels in the same period, while gasoline stocks dropped by 1.0 million barrels to 221.7 million barrels, API said. API uses different methods than the Energy Information Administration to calculate inventories.
Federal Reserve Chairman Ben Bernanke signaled additional rate cuts are in store, at least in the near term.
Shares of Fannie Mae and Freddie Mac jumped on Wednesday, after the federal regulator for the mortgage finance companies said it will lift an investment cap, in a move that will free up billions of dollars to invest in the U.S. housing market.
More than a fifth of Germany's electricity comes from burning hard coal, whose price for delivery into northwest Europe with settlement next year rose as much as 3.5 percent to $134 a metric ton, according to ICAP Plc. The contract has gained 19 percent this year. Surging demand in South Africa, China, India and the closure of a German coal mine continues to support prices.
Bank of Japan board member Atsushi Mizuno said Thursday the central bank needed to hold interest rates unchanged, while acknowledging rising downside risks to Japan's domestic economy and the global outlook.
South Korea's trade account balance deteriorated sharply in January, as the goods-trade account swung to deficit while the service-account deficit widened, data released by the Bank of Korea showed Thursday. The seasonally-adjusted current account deficit ballooned to $2.03 billion, from a deficit of $1.07 billion in December.
Crude oil for April delivery dropped $1.24, or 1.2%, to close at $99.64 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $12.10 to end at $961.0 an ounce on the New York Mercantile Exchange. Earlier, the contract hit a record $967.70 an ounce.
Luxury home builder Toll Brothers said it posted a fiscal first-quarter to Jan. 31 loss of $96 million, or 61 cents a share, after $153.3 million in write-downs. It earned $54.3 million, or 33 cents a share, in the year-ago quarter. Revenue dropped 23% to $842.9 million, and its backlog fell 42% to $2.4 billion. Excluding write-offs, it would've earned 35 cents a share during the quarter. The company is seeing "glimmers of hope" in the Naples, Fla. area and suburban Washington D.C.
The euro remained above the $1.51 level Wednesday morning, after the U.S. dollar set a new all-time low versus the single currency on fears the U.S. economy may be headed toward recession.
Gold futures hit a new record high in electronic trading on Wednesday, up as high as $961.30 an ounce, and recently up $11.50 to $960.40 an ounce.
Demand for durable goods fell back in January after a burst of orders in December, the Commerce Department reported Wednesday, another sign that the economy is slowing. New orders for durable goods fell 5.3% in January, close to the 5.1% drop anticipated by economists surveyed by MarketWatch. December's gains were revised lower to 4.4% from 5% previously reported. Much of the decline in January was due to the unwinding of the flood of orders for aircraft in December. Declining demand was seen in almost every industry in January, however, despite reports of higher exports.
New Zealand business confidence slipped to 10-month low in February, deteriorating sharply from the previous poll in December, as firms grew more pessimistic about the outlook amid weaker economic conditions, according to a survey released Wednesday.
Hong Kong lowers 2008 GDP estimate to 4% to 5%.
In early Wednesday trading, crude hit a record $102.
The European Commission fined Microsoft a record $1.35 billion for failing to comply with a 2004 antitrust ruling.
The monthly RealtyTrac.com survey of foreclosure activity nationwide showed that filings in Idaho jumped from 382 in January 2007 to 735 last month, an increase of 92 percent.
According to the SF Chronicle, there have been more large, environmentally damaging sewage spills in the San Francisco Bay Area in the first two months of 2008 than in the last 7 1/2 months of last year, a Chronicle analysis has found.The flood of effluent continued over the weekend when two spills in Marin County dumped thousands of gallons of sewage into San Francisco Bay and an adjoining waterway. There have been 276 sewage spills this year that either flowed into Bay Area waterways or contained at least 1,000 gallons of effluent, according to the analysis of State Water Resources Control Board statistics.That's more than 14 million gallons of sludge oozing out into the environment, the statistics show. That doesn't even include the Jan. 26 and Jan. 31 spills of 5.15 million gallons of raw and partially treated sewage by the Sewerage Agency of Southern Marin treatment plant in Mill Valley.
Brett Steenbarger: "My Cumulative Demand Supply Index hit an overbought level Tues, which has led to subnormal returns 20 days out."
According to the Seattle Times, Microsoft is celebrating the release of a new version of one of its most successful products outside of the desktop Windows and Office one-two punch. Windows Server 2008, which is being feted in a series of launch events starting in Los Angeles today, is the flagship product of Microsoft's long-term effort to build a presence in the lucrative market for software that businesses run behind the scenes. The part of the company that built the product, the Server and Tools unit, brought in sales of about $11.2 billion in the past fiscal year, more than one-fifth of Microsoft's total. It was very profitable, too, forming the third leg of the stool with Windows and Office.
Nouriel Roubini Says U.S. Recession May Last Up to Six Quarters.
Fannie Mae posted a $3.55 billion loss in the fourth quarter as the failure of homeowners to keep up with their mortgage payments dragged down the value of the company's assets. The net loss was $3.80 share, compared with profit of $604 million, or 49 cents, a year earlier, Washington-based Fannie Mae said in a statement today. Excluding some items, the per-share loss was $3.79, compared with the $1.20 average estimate of 12 analysts in a Bloomberg survey.
BMW said it is cutting 5,600 jobs, including full-time and temporary workers by the end of the year. Another 2,500 workers have already left the company. That brings the total number of jobs affected to 8,100.
The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas. Can you say a run on the banks?
Shares of Intel Corp. after JPMorgan cut its profit estimates for the world's largest chipmaker. JPMorgan analyst Christopher Danely said his checks indicate that Intel's first quarter is "trending below plan due to weaker than expected orders for microprocessors."
Nortel will cut 2100 jobs.
Allstate Corp. authorized a $2 billion share repurchase and increased its quarterly dividend 7.9 percent.
Sales of new U.S. homes fell by 2.8% in January, led by a drop of more than 10% in the Northeast, the Commerce Department reported Wednesday. Sales of new homes fell 2.8% to a seasonally adjusted annual rate of 588,000 in January. January's sales pace was down 33.9% compared with January 2007. December's sales pace for new homes was revised to 605,000, up slightly from the 604,000 reported earlier.
U.S. crude inventories rose more than expected, up 3.2 million barrels to 308.5 million barrels in the week ending Feb. 22, U.S. Energy Information Administration reported on Wednesday. Gasoline supplies rose by 2.3 million barrels in the latest week, while distillate stocks fell by 2.5 million barrels, EIA reported. By comparison, U.S. crude inventories fell by 1.7 million barrels to 307.3 million barrels in the week ending Feb. 22, the American Petroleum Institute reported on Wednesday. Distillate stocks fell by 1.2 million barrels to 121.7 million barrels in the same period, while gasoline stocks dropped by 1.0 million barrels to 221.7 million barrels, API said. API uses different methods than the Energy Information Administration to calculate inventories.
Federal Reserve Chairman Ben Bernanke signaled additional rate cuts are in store, at least in the near term.
Shares of Fannie Mae and Freddie Mac jumped on Wednesday, after the federal regulator for the mortgage finance companies said it will lift an investment cap, in a move that will free up billions of dollars to invest in the U.S. housing market.
More than a fifth of Germany's electricity comes from burning hard coal, whose price for delivery into northwest Europe with settlement next year rose as much as 3.5 percent to $134 a metric ton, according to ICAP Plc. The contract has gained 19 percent this year. Surging demand in South Africa, China, India and the closure of a German coal mine continues to support prices.
Bank of Japan board member Atsushi Mizuno said Thursday the central bank needed to hold interest rates unchanged, while acknowledging rising downside risks to Japan's domestic economy and the global outlook.
South Korea's trade account balance deteriorated sharply in January, as the goods-trade account swung to deficit while the service-account deficit widened, data released by the Bank of Korea showed Thursday. The seasonally-adjusted current account deficit ballooned to $2.03 billion, from a deficit of $1.07 billion in December.
Crude oil for April delivery dropped $1.24, or 1.2%, to close at $99.64 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $12.10 to end at $961.0 an ounce on the New York Mercantile Exchange. Earlier, the contract hit a record $967.70 an ounce.
Tuesday, February 26, 2008
Prices
2/27/08 Prices
The dollar index touched an all-time low of 74.706.
Crude for April delivery settled up $1.65, or 1.7% on the New York Mercantile Exchange. Earlier it rose to a new intraday high of $101.15 a barrel. Heating-oil futures for March delivery ended at $2.815 a gallon, the highest closing a front-month contract has ever seen.
The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting. The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.
Thomas Jefferson: “If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless”
Prices of existing U.S. single-family homes slumped 8.9 percent in the fourth quarter versus a year earlier, the largest decline in the 20-year history of a national home price index released on Tuesday. The S&P/Case-Shiller composite index of 10 metropolitan areas fell 2.3 percent in December versus November, to 200.55, and fell 9.8 percent year-over-year, S&P said in a statement.
Target Corp reported a more than 8 percent drop in quarterly profit on Tuesday after shoppers spurned purchases of higher-margin merchandise like clothes in favor of necessities like food. "Our financial performance in 2007 fell short of our expectations as the pace of sales and earnings slowed considerably in the second half of the year," said Bob Ulrich, chairman and chief executive officer, in a statement.
Home Depot Inc said on Tuesday earnings per share could fall as much as 24 percent this year, and it plans to open fewer new stores due to the slumping U.S. housing market. The world's largest home improvement retailer also reported profit for the 2007 fourth quarter that fell short of analysts' estimates, and its shares fell 1.6 percent in trading before the bell.
U.S. home foreclosures for January increased 57 percent from a year earlier, but the pace at least temporarily subsided in response to private and government efforts to help homeowners, RealtyTrac said. Foreclosure filings in January rose 8 percent from the prior month after jumping 19 percent a year earlier, the real estate marketing company said on Tuesday.
A comScore report showed lower paid-click search rates for Google from a year ago.
Office Depot Inc.'s net income fell 85% to $18.8 million, or 7 cents a share, from $126.6 million, or 45 cents a share, a year earlier.
U.S. consumer confidence slumped to a reading of 75 in February.
Chicago wheat prices rose by the most in more than five years, breaching $12 a bushel for the first time.
VMware has struck a deal to install its virtualisation software on some servers shipped by Dell, Hewlett-Packard, IBM and other suppliers of computer equipment to big companies.The move also includes servers made by Fujitsu Siemens.
The Oil Drum: "Oil output in Mexico, the third-biggest supplier to the US, is declining, and the state company Petroleos Mexicanos (Pemex) lacks the technology to explore for new reserves. For many the answer seems simple: more capital. But now that senators have begun debating ways to attain that capital – a top priority of President Felipe Calderón – resistance has mounted, particularly to the idea to allowing in private enterprise." This from a country that
nationalized U.S. oil interests in 1936-37 that became Pemex.
Sam Zell Sees Start of Housing Recovery in the Spring.
Rob Hanna: "Not all breakouts are good news. Between the 2-day surge and the triangle breakout study it appears the edge over the next few days is to the downside."
Brad Setser: "The rise in shipping from Asia to Europe and the Middle East helps to explain how the Baltic freight index decoupled from the US economic cycle. The Baltic dry index rose strongly for most of the year even as the US (non-oil) import growth slowed in 2007. Things obviously changed a bit in November. It also explains why Europe is increasingly putting pressure on China to appreciate against the euro, not just the dollar -- and why Europe seems to worry more about about the risk that it might attract too much investment from sovereign funds than to worry about the risk that it might attract too little."
U.S. home prices fell 0.3% in 2007, the first annual decline in home prices in decades, according to the purchase-only home-price index released Tuesday by the Office of Federal Housing Enterprise Oversight.
Natural gas rose on an outlook for supplies to decline amid a wave of colder weather in the regions of highest consumption. Lower-than-normal temperatures are probable March 4 through March 10 in the Midwest, the U.S. Climate Prediction Center in Camp Springs, Maryland, said in an outlook released yesterday. Gas for March delivery rose 6.6 cents, or 0.7 percent, to $9.252 per million British thermal units at 10:17 a.m. on the New York Mercantile Exchange. Futures earlier climbed to $9.267. Gas has risen 24 percent this year.
Marsoft: "A strong third quarter was followed by a spectacular fourth quarter, as dry bulk freight rates and vessel values shattered all previous records. By the end of the year, dry bulk freight rates had risen by 30-50% relative to their third quarter levels, and they were nearly triple their year-earlier levels...However, after these dramatic late-2007 gains, the dry bulk market experienced a significant correction in late December and early 2008, with spot rates falling by 50% in January, to levels last seen in the second quarter of 2007. At the very end of January, rates finally moved up again. Dry bulk ship prices also soared into uncharted territory during late 2007, rising by 20% over the past three months and by about 100% over the past year. The price of a 5 year-old Cape was marked up from $118 million in the third quarter to $146 million in the fourth quarter. Broker reports show prices edging down in January, in response to lower freight rates...
China remained the driving force behind the dry bulk market boom, as we estimate that it was responsible for just over half of the growth in global tonne-mile demand during 2007, and close to three-quarters if the increase seen during the fourth quarter. But interestingly, the increase in Chinese import activity came despite a noteworthy deceleration in steel production growth during the final months of 2007. After growing at a 19% pace in the first half of 2007, Chinese steel output grew by only 13% in the second half of the year.
The slowdown was partly due to a decline in Chinese steel exports, which were hit by a combination of restrictive tax measures implemented by the Chinese government, as well as by protectionist measures taken in Europe. And yet, despite the slowdown in steel production growth, Chinese iron ore imports remained robust, and were increasingly sourced from longer-haul suppliers such as Brazil. Despite a rise in domestic Chinese iron ore production, the low quality of China’s domestic supplies makes rising imports a necessity."
IBM said it plans to make about $12 billion in stock repurchases in 2008. The company said expected buyback activity could add about 5 cents a share to 2008 earnings, and now expects a profit of at least $8.25 a share for the year.
Despite disappointing inflation reports for January, the weak economy and fragile financial markets are a bigger threat to the economy than higher prices, said Federal Reserve Vice Chairman Donald Kohn. The bigger threats to the economy are the Fed's printing press, the ever-increasing spending by Congress and the Bush administration, the out-of-control government and consumer debt levels, and the wars in Iraq and Afghanistan.
Gold futures for April delivery climbed $8.40, or 0.9 percent, to $948.90 an ounce on the Comex division of the New York Mercantile Exchange. Silver futures for March delivery jumped 63.5 cents to $18.72 an ounce. The price earlier reached $18.77, the highest since December 1980. Silver gained 25 percent this year, and gold climbed 13 percent.
Cotton rallied for a sixth session to a 4 1/2-year high and wheat was limit up. Wheat climbed above $12 a bushel for the first time in Chicago.
Imports of refined copper and alloys by China gained 7.1 percent in January from a year earlier, the nation's customs office said Feb. 22. China is the world's biggest consumer of the metal.
Ernest Hemingway: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
The dollar index touched an all-time low of 74.706.
Crude for April delivery settled up $1.65, or 1.7% on the New York Mercantile Exchange. Earlier it rose to a new intraday high of $101.15 a barrel. Heating-oil futures for March delivery ended at $2.815 a gallon, the highest closing a front-month contract has ever seen.
The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting. The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.
Thomas Jefferson: “If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless”
Prices of existing U.S. single-family homes slumped 8.9 percent in the fourth quarter versus a year earlier, the largest decline in the 20-year history of a national home price index released on Tuesday. The S&P/Case-Shiller composite index of 10 metropolitan areas fell 2.3 percent in December versus November, to 200.55, and fell 9.8 percent year-over-year, S&P said in a statement.
Target Corp reported a more than 8 percent drop in quarterly profit on Tuesday after shoppers spurned purchases of higher-margin merchandise like clothes in favor of necessities like food. "Our financial performance in 2007 fell short of our expectations as the pace of sales and earnings slowed considerably in the second half of the year," said Bob Ulrich, chairman and chief executive officer, in a statement.
Home Depot Inc said on Tuesday earnings per share could fall as much as 24 percent this year, and it plans to open fewer new stores due to the slumping U.S. housing market. The world's largest home improvement retailer also reported profit for the 2007 fourth quarter that fell short of analysts' estimates, and its shares fell 1.6 percent in trading before the bell.
U.S. home foreclosures for January increased 57 percent from a year earlier, but the pace at least temporarily subsided in response to private and government efforts to help homeowners, RealtyTrac said. Foreclosure filings in January rose 8 percent from the prior month after jumping 19 percent a year earlier, the real estate marketing company said on Tuesday.
A comScore report showed lower paid-click search rates for Google from a year ago.
Office Depot Inc.'s net income fell 85% to $18.8 million, or 7 cents a share, from $126.6 million, or 45 cents a share, a year earlier.
U.S. consumer confidence slumped to a reading of 75 in February.
Chicago wheat prices rose by the most in more than five years, breaching $12 a bushel for the first time.
VMware has struck a deal to install its virtualisation software on some servers shipped by Dell, Hewlett-Packard, IBM and other suppliers of computer equipment to big companies.The move also includes servers made by Fujitsu Siemens.
The Oil Drum: "Oil output in Mexico, the third-biggest supplier to the US, is declining, and the state company Petroleos Mexicanos (Pemex) lacks the technology to explore for new reserves. For many the answer seems simple: more capital. But now that senators have begun debating ways to attain that capital – a top priority of President Felipe Calderón – resistance has mounted, particularly to the idea to allowing in private enterprise." This from a country that
nationalized U.S. oil interests in 1936-37 that became Pemex.
Sam Zell Sees Start of Housing Recovery in the Spring.
Rob Hanna: "Not all breakouts are good news. Between the 2-day surge and the triangle breakout study it appears the edge over the next few days is to the downside."
Brad Setser: "The rise in shipping from Asia to Europe and the Middle East helps to explain how the Baltic freight index decoupled from the US economic cycle. The Baltic dry index rose strongly for most of the year even as the US (non-oil) import growth slowed in 2007. Things obviously changed a bit in November. It also explains why Europe is increasingly putting pressure on China to appreciate against the euro, not just the dollar -- and why Europe seems to worry more about about the risk that it might attract too much investment from sovereign funds than to worry about the risk that it might attract too little."
U.S. home prices fell 0.3% in 2007, the first annual decline in home prices in decades, according to the purchase-only home-price index released Tuesday by the Office of Federal Housing Enterprise Oversight.
Natural gas rose on an outlook for supplies to decline amid a wave of colder weather in the regions of highest consumption. Lower-than-normal temperatures are probable March 4 through March 10 in the Midwest, the U.S. Climate Prediction Center in Camp Springs, Maryland, said in an outlook released yesterday. Gas for March delivery rose 6.6 cents, or 0.7 percent, to $9.252 per million British thermal units at 10:17 a.m. on the New York Mercantile Exchange. Futures earlier climbed to $9.267. Gas has risen 24 percent this year.
Marsoft: "A strong third quarter was followed by a spectacular fourth quarter, as dry bulk freight rates and vessel values shattered all previous records. By the end of the year, dry bulk freight rates had risen by 30-50% relative to their third quarter levels, and they were nearly triple their year-earlier levels...However, after these dramatic late-2007 gains, the dry bulk market experienced a significant correction in late December and early 2008, with spot rates falling by 50% in January, to levels last seen in the second quarter of 2007. At the very end of January, rates finally moved up again. Dry bulk ship prices also soared into uncharted territory during late 2007, rising by 20% over the past three months and by about 100% over the past year. The price of a 5 year-old Cape was marked up from $118 million in the third quarter to $146 million in the fourth quarter. Broker reports show prices edging down in January, in response to lower freight rates...
China remained the driving force behind the dry bulk market boom, as we estimate that it was responsible for just over half of the growth in global tonne-mile demand during 2007, and close to three-quarters if the increase seen during the fourth quarter. But interestingly, the increase in Chinese import activity came despite a noteworthy deceleration in steel production growth during the final months of 2007. After growing at a 19% pace in the first half of 2007, Chinese steel output grew by only 13% in the second half of the year.
The slowdown was partly due to a decline in Chinese steel exports, which were hit by a combination of restrictive tax measures implemented by the Chinese government, as well as by protectionist measures taken in Europe. And yet, despite the slowdown in steel production growth, Chinese iron ore imports remained robust, and were increasingly sourced from longer-haul suppliers such as Brazil. Despite a rise in domestic Chinese iron ore production, the low quality of China’s domestic supplies makes rising imports a necessity."
IBM said it plans to make about $12 billion in stock repurchases in 2008. The company said expected buyback activity could add about 5 cents a share to 2008 earnings, and now expects a profit of at least $8.25 a share for the year.
Despite disappointing inflation reports for January, the weak economy and fragile financial markets are a bigger threat to the economy than higher prices, said Federal Reserve Vice Chairman Donald Kohn. The bigger threats to the economy are the Fed's printing press, the ever-increasing spending by Congress and the Bush administration, the out-of-control government and consumer debt levels, and the wars in Iraq and Afghanistan.
Gold futures for April delivery climbed $8.40, or 0.9 percent, to $948.90 an ounce on the Comex division of the New York Mercantile Exchange. Silver futures for March delivery jumped 63.5 cents to $18.72 an ounce. The price earlier reached $18.77, the highest since December 1980. Silver gained 25 percent this year, and gold climbed 13 percent.
Cotton rallied for a sixth session to a 4 1/2-year high and wheat was limit up. Wheat climbed above $12 a bushel for the first time in Chicago.
Imports of refined copper and alloys by China gained 7.1 percent in January from a year earlier, the nation's customs office said Feb. 22. China is the world's biggest consumer of the metal.
Ernest Hemingway: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Monday, February 25, 2008
The Housing Market
2/26/08 The Housing Market
Lowe's Companies, Inc. reported net earnings of $408 million for the quarter ended February 1, 2008, a 33.4 percent decline over the same period a year ago. Diluted earnings per share declined 30.0 percent to $0.28 from $0.40 in the fourth quarter of 2006. For the fiscal year ended February 1, 2008, net earnings declined 9.5 percent to $2.81 billion while diluted earnings per share declined 6.5 percent to $1.86. Comparable store sales declined 7.6 percent for the fourth quarter and 5.1 percent for fiscal 2007. "As we look to fiscal 2008, we know the next several quarters will be challenging on many fronts as industry sales are likely to remain soft," Niblock, the company's chairman and ceo continued. "We remain focused on what we can control: providing great customer service while managing expenses and offering customers the best shopping experience in home improvement. As the year progresses, the recent Federal Reserve interest rate cuts and the approved fiscal stimulus package are expected to lend support to the broader economy and the consumer. As a result, many of the headwinds facing the housing market and the home improvement industry should lessen, and consumers' confidence in investing in and improving their homes should improve."
Home prices are forecast to fall 12 percent this year, according to Richard Syron, chief executive officer of Freddie Mac, the second-largest provider of money for U.S. home loans. Housing starts may plunge 22 percent in 2008 and remain at their lowest level in 16 years, he said in a speech to the homebuilders association on Feb. 13.
Visa Inc. disclosed details of its much-anticipated initial public offering early Monday. The San Francisco-based card giant, in a Securities and Exchange Commission filing, said it's registered 446.6 million Class A common shares, including 40.6 million subject to underwriters' option to purchase additional stock. Visa also pegged its proposed offering price in a range of $37 to $42 a share, meaning the IPO would generate maximum potential proceeds of nearly $18.76 billion. The company's applied for a New York Stock Exchange listing under the symbol V.
Goldman Sachs upgraded oil and gas services group company BJ Services Company to neutral from sell. "We see U.S. natural gas fundamentals as among the most attractive in the energy landscape, and believe a higher expected commodity price increases visibility into our North American drilling forecasts," the broker said.
Deutsche Bank downgraded New York Times Co. to sell from hold.
Silver mining group Silver Wheaton Corp. expects to have annual silver sales of around 15 million ounces in 2008, rising to 25 million ounces in 2010.
Anglo-Swiss mining firm Xstrata said that it saw record annual production for coking and thermal coal, ferrochrome, nickel, zinc mining and platinum operations in 2007. Xstrata also said that it produced record amounts of copper in the second half of the year, with particularly strong operating performances from Tintaya, Ernest Henry and Collahuasi. In total, Xstrata produced just under 1 million tonnes of copper, down 2% from a year ago, after a 46-day shut-down affected first half volumes.
According to the NY Times, the Middle East’s heavy reliance on food imports has made it especially vulnerable to the global rise in commodity prices over the past year, said George T. Abed, the former governor of the Palestine Monetary Authority and a director at the Institute of International Finance, an organization based in Washington. “For many basic products, we don’t have free market prices, we have monopoly prices,” said Samer Tawil, a former minister of national economy in Jordan. “Oil, cement, rice, meat, sugar: these are all imported almost exclusively by one importer each here. Corruption is one thing when it’s about building a road, but when it affects my food, that’s different.”
NY Times: "Another buyout is in danger of collapsing — but this time because one of the banks involved is suing its own client, the private equity firm trying to do the deal. The deal in jeopardy is Clear Channel’s $1.2 billion sale of its television unit to Providence Equity Partners, a media-focused buyout firm. Providence began to balk at the price, citing deterioration in the business and the economy, prompting a lawsuit by Clear Channel. Yet by late last week, the two sides had struck a deal in principle to lower the price by $100 million. But now comes a new bombshell. Wachovia, one of the three banks financing the deal, is now refusing to commit. It even sued its client, Providence, in a North Carolina state court on Friday, contending that the new agreement has voided its previous commitment. Goldman Sachs and UBS, the two other banks, have committed to finance the new transaction, which now calls for Providence to borrow less money at a higher interest rate."
Professor Cusumano suggests that rather than acquire Yahoo, Microsoft should pursue SAP.
The Association for Business Economics survey of economists showed 45% think the US economy will go into recession. How about we're in a recession?
The Wall Street Journal writes that Goldman Sachs may post its lowest profit in three years due to write-downs in debt from corporate buy-outs.
To accuse Obama of stealing ``two lines by somebody who is a colleague of yours is almost like saying you're plagiarizing from your speechwriter,'' said Stephen Hess, a presidential scholar at the Brookings Institution in Washington who was a speech writer for President Dwight D. Eisenhower.
An ingredient in curries, stir-fries and Skittles candy, Malaysian palm oil costs 15 percent less than soybean oil on the Chicago Board of Trade. Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said the two may soon be even money.
Russia, the world's second-biggest oil exporter, is scheduled to ship about 5 percent more crude from its main terminals in March.
Nigeria, Africa's biggest oil producer, raised the official selling prices for its crude exports loading in March to match record highs.
Brown University's governing board on Saturday said grants will be substituted for loans for families that make less than $100,000 per year. Parents who earn less than $60,000 also will no longer be expected to make a financial contribution to fund their child's education at Brown.
Qatar's prime minister, who heads the country's $60 billion sovereign wealth fund, said he favors investing in European over U.S. lenders because U.S. bank stocks are likely to fall further on sub-prime-mortgage write downs.
Roche Holding AG shares rose 3.5 percent on Monday after US regulators approved its Avastin drug for treating advanced breast cancer and added a potentially significant new revenue source.
Builders are doing whatever they can to move properties. In February, almost half surveyed said they cut prices, according to the National Association of Homebuilders, a Washington-based trade group. More than half ``reported offering optional items at no charge and 44 percent said they paid all or some of the closing costs.''
Jean-Marie Eveillard added to his holdings in Palatin Technologies Inc by 60.35%. His purchase prices were between $0.21 and $0.38, with an estimated average price of $0.3. The impact to his portfolio due to this purchase was less than 0.01%. His holdings were 2,922,848 shares as of 12/31/2007. Palatin Technologies, Inc., a biopharmaceutical company, engages in the discovery and development of receptor-specific small molecule and peptide therapeutics, including melanocortin (MC)-based therapeutics in the United States. Palatin Technologies Inc has a market cap of $23.90 million; its shares were traded at around $0.31 with P/S ratio of 1.35.
Getty Images has agreed to be bought by a unit of Hellman & Friedman LLC for $34 per share in cash. The offer puts a premium of 39 percent over the stock's closing price Friday of $24.45.
Brink's Co., a provider of security-related services, said Monday its board approved the spin-off of its home security unit into a separate publicly traded company. The spin-off, which is anticipated to involve a tax-free stock distribution to shareholders, is expected to be completed in the fourth quarter.
Oppenheimer analysts on Monday slashed their earnings estimate for Citigroup Inc's. full year 2008 earnings per share estimate by 70%, to 75 cents from $2.70, and said the bank may have to sell $100 billion of assets to put its balance sheet right. Analyst Meredith Whitney said Monday that Citi shares could fall below $16 a share as they retreat to valuations from the last difficult credit cycle of 1990-1991.
"We can't keep passing unfair trade deals like Nafta that put special interests over our workers' interests," Sen. Obama said. "The fact is, she (Hillary Clinton) was saying great things about Nafta until she started running for president," Sen. Obama said.
Resales of U.S. homes and condos dropped 0.4% in January to a seasonally adjusted annualized rate of 4.89 million even as the number of homes on the market rose, the National Association of Realtors reported Monday. It was the lowest sales pace since the real estate group began tracking combined sales in 1999. Resales were down 23.4% compared with the previous January. The inventory of homes on the market rose 5.5% to 4.19 million, representing a 10.3-month supply at the January sales pace. The inventory rose 18.4% compared with January 2007. With a glut of homes on the market, the median sales price fell 4.6% over the past year to $201,000.
The Oil Drum: "Brazil has declined to cede any of its imports of Bolivian natural gas to Argentina, which is struggling to find more energy sources to avoid supply shortages that could derail its fast-growing economy. Argentina and Brazil are facing the possibility of short-term energy crises from a lack of natural gas, which is needed to fuel industries and generate electricity for residents. Bolivia is sitting in the middle, with the region's largest gas reserves."
David H. McCormick, under secretary for international affairs at the Treasury Department, said Monday that the Bush administration considers the plan to sell 12.9 million ounces of gold as "probably the most viable" option to ensure the long-term funding of the IMF, Dow Jones Newswires reported Monday.
Standard & Poor's Corp. reaffirmed AAA ratings on bond insurers MBIA and Ambac Financial Group. MBIA was taken off the credit watch, but the rating agency left Ambac on its "creditwatch negative" list, although that designation could be removed. In response, the Dow jumped 189 points.
Fitch Ratings Monday placed several mortgage insurers, including MGIC Investment Corp., The PMI Group, and Radian Group on Rating Watch Negative, citing continued weakness in the U.S. mortgage markets.
Nordstrom Inc. reported a fourth-quarter profit of $212 million, or 92 cents a share, compared with $232 million, or 89 cents a share, a year earlier. Sales fell 4.4% to $2.5 billion because of what the company described as a "challenging" consumer and retail environment.The company's estimate for fiscal Jan-2009 is EPS $2.75 to $2.90 on diluted shares outstanding of 228 million
Crude for April delivery gained 42 cents, or 0.4%, to settle at $99.23 a barrel on the New York Mercantile Exchange. Gold for April delivery fell $7.30 to end at $940.50 an ounce on the New York Mercantile Exchange.
According to data released Monday by Nielsen Online. Google's share of the Internet search market grew to 56.9% in January, compared to 56.3% in the previous month. Yahoo Inc. also saw a gain in its search market share in January, with an increase to 19% from 17.7% in December. Microsoft Corp.saw its share slip over the same period, falling to 12.1% from 13.8%.
John Hussman: "The total return of the S&P 500 is now a few weeks shy of having lagged riskless Treasury bills for a decade...expectations of 4-5% annual total returns for the S&P 500 over the coming decade would be reasonable."
According to the WSJ, German engineering conglomerate Siemens AG plans to slash nearly 4,000 jobs from its struggling telecommunications-equipment unit and shift roughly another 3,000 workers elsewhere, according to a person familiar with the matter.
The company behind the hugely popular video game "Grand Theft Auto" says it is not going to jump at a $2 billion buyout offer from Electronic Arts Inc. The offer is "the wrong price at the wrong time," Take-Two Interactive Software Inc. chief executive Ben Feder said Monday after the news of the $26-per-share bid sent Take-Two's shares up 55 percent to a $26.89 close. Electronic Arts is undervaluing Take-Two and not factoring in the benefits of its recent turnaround efforts, Feder said in an interview. Take-Two said it is open to discussions with EA, but wants to wait until April 30, the day after the latest version of Grand Theft Auto hits store shelves.
In the past two months, Senator Barack Obama has built a commanding coalition among Democratic voters, with especially strong support among men, and is now viewed by most Democrats as the candidate best able to defeat Senator John McCain, according to the latest New York Times/CBS News Poll. For the first time in a New York Times/CBS News Poll, he moved ahead of Mrs. Clinton nationally, with 54 percent of Democratic primary voters saying they wanted to see him nominated, while 38 percent preferred Mrs. Clinton. A new USA Today/Gallup Poll released Monday showed a similar result, 51 percent for Mr. Obama to 39 percent for Mrs. Clinton.
Hillary Clinton: “Many of you are well enough off that the tax cuts may have helped you. We're saying that for America to get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good.” Hello socialism!!!!
Lowe's Companies, Inc. reported net earnings of $408 million for the quarter ended February 1, 2008, a 33.4 percent decline over the same period a year ago. Diluted earnings per share declined 30.0 percent to $0.28 from $0.40 in the fourth quarter of 2006. For the fiscal year ended February 1, 2008, net earnings declined 9.5 percent to $2.81 billion while diluted earnings per share declined 6.5 percent to $1.86. Comparable store sales declined 7.6 percent for the fourth quarter and 5.1 percent for fiscal 2007. "As we look to fiscal 2008, we know the next several quarters will be challenging on many fronts as industry sales are likely to remain soft," Niblock, the company's chairman and ceo continued. "We remain focused on what we can control: providing great customer service while managing expenses and offering customers the best shopping experience in home improvement. As the year progresses, the recent Federal Reserve interest rate cuts and the approved fiscal stimulus package are expected to lend support to the broader economy and the consumer. As a result, many of the headwinds facing the housing market and the home improvement industry should lessen, and consumers' confidence in investing in and improving their homes should improve."
Home prices are forecast to fall 12 percent this year, according to Richard Syron, chief executive officer of Freddie Mac, the second-largest provider of money for U.S. home loans. Housing starts may plunge 22 percent in 2008 and remain at their lowest level in 16 years, he said in a speech to the homebuilders association on Feb. 13.
Visa Inc. disclosed details of its much-anticipated initial public offering early Monday. The San Francisco-based card giant, in a Securities and Exchange Commission filing, said it's registered 446.6 million Class A common shares, including 40.6 million subject to underwriters' option to purchase additional stock. Visa also pegged its proposed offering price in a range of $37 to $42 a share, meaning the IPO would generate maximum potential proceeds of nearly $18.76 billion. The company's applied for a New York Stock Exchange listing under the symbol V.
Goldman Sachs upgraded oil and gas services group company BJ Services Company to neutral from sell. "We see U.S. natural gas fundamentals as among the most attractive in the energy landscape, and believe a higher expected commodity price increases visibility into our North American drilling forecasts," the broker said.
Deutsche Bank downgraded New York Times Co. to sell from hold.
Silver mining group Silver Wheaton Corp. expects to have annual silver sales of around 15 million ounces in 2008, rising to 25 million ounces in 2010.
Anglo-Swiss mining firm Xstrata said that it saw record annual production for coking and thermal coal, ferrochrome, nickel, zinc mining and platinum operations in 2007. Xstrata also said that it produced record amounts of copper in the second half of the year, with particularly strong operating performances from Tintaya, Ernest Henry and Collahuasi. In total, Xstrata produced just under 1 million tonnes of copper, down 2% from a year ago, after a 46-day shut-down affected first half volumes.
According to the NY Times, the Middle East’s heavy reliance on food imports has made it especially vulnerable to the global rise in commodity prices over the past year, said George T. Abed, the former governor of the Palestine Monetary Authority and a director at the Institute of International Finance, an organization based in Washington. “For many basic products, we don’t have free market prices, we have monopoly prices,” said Samer Tawil, a former minister of national economy in Jordan. “Oil, cement, rice, meat, sugar: these are all imported almost exclusively by one importer each here. Corruption is one thing when it’s about building a road, but when it affects my food, that’s different.”
NY Times: "Another buyout is in danger of collapsing — but this time because one of the banks involved is suing its own client, the private equity firm trying to do the deal. The deal in jeopardy is Clear Channel’s $1.2 billion sale of its television unit to Providence Equity Partners, a media-focused buyout firm. Providence began to balk at the price, citing deterioration in the business and the economy, prompting a lawsuit by Clear Channel. Yet by late last week, the two sides had struck a deal in principle to lower the price by $100 million. But now comes a new bombshell. Wachovia, one of the three banks financing the deal, is now refusing to commit. It even sued its client, Providence, in a North Carolina state court on Friday, contending that the new agreement has voided its previous commitment. Goldman Sachs and UBS, the two other banks, have committed to finance the new transaction, which now calls for Providence to borrow less money at a higher interest rate."
Professor Cusumano suggests that rather than acquire Yahoo, Microsoft should pursue SAP.
The Association for Business Economics survey of economists showed 45% think the US economy will go into recession. How about we're in a recession?
The Wall Street Journal writes that Goldman Sachs may post its lowest profit in three years due to write-downs in debt from corporate buy-outs.
To accuse Obama of stealing ``two lines by somebody who is a colleague of yours is almost like saying you're plagiarizing from your speechwriter,'' said Stephen Hess, a presidential scholar at the Brookings Institution in Washington who was a speech writer for President Dwight D. Eisenhower.
An ingredient in curries, stir-fries and Skittles candy, Malaysian palm oil costs 15 percent less than soybean oil on the Chicago Board of Trade. Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said the two may soon be even money.
Russia, the world's second-biggest oil exporter, is scheduled to ship about 5 percent more crude from its main terminals in March.
Nigeria, Africa's biggest oil producer, raised the official selling prices for its crude exports loading in March to match record highs.
Brown University's governing board on Saturday said grants will be substituted for loans for families that make less than $100,000 per year. Parents who earn less than $60,000 also will no longer be expected to make a financial contribution to fund their child's education at Brown.
Qatar's prime minister, who heads the country's $60 billion sovereign wealth fund, said he favors investing in European over U.S. lenders because U.S. bank stocks are likely to fall further on sub-prime-mortgage write downs.
Roche Holding AG shares rose 3.5 percent on Monday after US regulators approved its Avastin drug for treating advanced breast cancer and added a potentially significant new revenue source.
Builders are doing whatever they can to move properties. In February, almost half surveyed said they cut prices, according to the National Association of Homebuilders, a Washington-based trade group. More than half ``reported offering optional items at no charge and 44 percent said they paid all or some of the closing costs.''
Jean-Marie Eveillard added to his holdings in Palatin Technologies Inc by 60.35%. His purchase prices were between $0.21 and $0.38, with an estimated average price of $0.3. The impact to his portfolio due to this purchase was less than 0.01%. His holdings were 2,922,848 shares as of 12/31/2007. Palatin Technologies, Inc., a biopharmaceutical company, engages in the discovery and development of receptor-specific small molecule and peptide therapeutics, including melanocortin (MC)-based therapeutics in the United States. Palatin Technologies Inc has a market cap of $23.90 million; its shares were traded at around $0.31 with P/S ratio of 1.35.
Getty Images has agreed to be bought by a unit of Hellman & Friedman LLC for $34 per share in cash. The offer puts a premium of 39 percent over the stock's closing price Friday of $24.45.
Brink's Co., a provider of security-related services, said Monday its board approved the spin-off of its home security unit into a separate publicly traded company. The spin-off, which is anticipated to involve a tax-free stock distribution to shareholders, is expected to be completed in the fourth quarter.
Oppenheimer analysts on Monday slashed their earnings estimate for Citigroup Inc's. full year 2008 earnings per share estimate by 70%, to 75 cents from $2.70, and said the bank may have to sell $100 billion of assets to put its balance sheet right. Analyst Meredith Whitney said Monday that Citi shares could fall below $16 a share as they retreat to valuations from the last difficult credit cycle of 1990-1991.
"We can't keep passing unfair trade deals like Nafta that put special interests over our workers' interests," Sen. Obama said. "The fact is, she (Hillary Clinton) was saying great things about Nafta until she started running for president," Sen. Obama said.
Resales of U.S. homes and condos dropped 0.4% in January to a seasonally adjusted annualized rate of 4.89 million even as the number of homes on the market rose, the National Association of Realtors reported Monday. It was the lowest sales pace since the real estate group began tracking combined sales in 1999. Resales were down 23.4% compared with the previous January. The inventory of homes on the market rose 5.5% to 4.19 million, representing a 10.3-month supply at the January sales pace. The inventory rose 18.4% compared with January 2007. With a glut of homes on the market, the median sales price fell 4.6% over the past year to $201,000.
The Oil Drum: "Brazil has declined to cede any of its imports of Bolivian natural gas to Argentina, which is struggling to find more energy sources to avoid supply shortages that could derail its fast-growing economy. Argentina and Brazil are facing the possibility of short-term energy crises from a lack of natural gas, which is needed to fuel industries and generate electricity for residents. Bolivia is sitting in the middle, with the region's largest gas reserves."
David H. McCormick, under secretary for international affairs at the Treasury Department, said Monday that the Bush administration considers the plan to sell 12.9 million ounces of gold as "probably the most viable" option to ensure the long-term funding of the IMF, Dow Jones Newswires reported Monday.
Standard & Poor's Corp. reaffirmed AAA ratings on bond insurers MBIA and Ambac Financial Group. MBIA was taken off the credit watch, but the rating agency left Ambac on its "creditwatch negative" list, although that designation could be removed. In response, the Dow jumped 189 points.
Fitch Ratings Monday placed several mortgage insurers, including MGIC Investment Corp., The PMI Group, and Radian Group on Rating Watch Negative, citing continued weakness in the U.S. mortgage markets.
Nordstrom Inc. reported a fourth-quarter profit of $212 million, or 92 cents a share, compared with $232 million, or 89 cents a share, a year earlier. Sales fell 4.4% to $2.5 billion because of what the company described as a "challenging" consumer and retail environment.The company's estimate for fiscal Jan-2009 is EPS $2.75 to $2.90 on diluted shares outstanding of 228 million
Crude for April delivery gained 42 cents, or 0.4%, to settle at $99.23 a barrel on the New York Mercantile Exchange. Gold for April delivery fell $7.30 to end at $940.50 an ounce on the New York Mercantile Exchange.
According to data released Monday by Nielsen Online. Google's share of the Internet search market grew to 56.9% in January, compared to 56.3% in the previous month. Yahoo Inc. also saw a gain in its search market share in January, with an increase to 19% from 17.7% in December. Microsoft Corp.saw its share slip over the same period, falling to 12.1% from 13.8%.
John Hussman: "The total return of the S&P 500 is now a few weeks shy of having lagged riskless Treasury bills for a decade...expectations of 4-5% annual total returns for the S&P 500 over the coming decade would be reasonable."
According to the WSJ, German engineering conglomerate Siemens AG plans to slash nearly 4,000 jobs from its struggling telecommunications-equipment unit and shift roughly another 3,000 workers elsewhere, according to a person familiar with the matter.
The company behind the hugely popular video game "Grand Theft Auto" says it is not going to jump at a $2 billion buyout offer from Electronic Arts Inc. The offer is "the wrong price at the wrong time," Take-Two Interactive Software Inc. chief executive Ben Feder said Monday after the news of the $26-per-share bid sent Take-Two's shares up 55 percent to a $26.89 close. Electronic Arts is undervaluing Take-Two and not factoring in the benefits of its recent turnaround efforts, Feder said in an interview. Take-Two said it is open to discussions with EA, but wants to wait until April 30, the day after the latest version of Grand Theft Auto hits store shelves.
In the past two months, Senator Barack Obama has built a commanding coalition among Democratic voters, with especially strong support among men, and is now viewed by most Democrats as the candidate best able to defeat Senator John McCain, according to the latest New York Times/CBS News Poll. For the first time in a New York Times/CBS News Poll, he moved ahead of Mrs. Clinton nationally, with 54 percent of Democratic primary voters saying they wanted to see him nominated, while 38 percent preferred Mrs. Clinton. A new USA Today/Gallup Poll released Monday showed a similar result, 51 percent for Mr. Obama to 39 percent for Mrs. Clinton.
Hillary Clinton: “Many of you are well enough off that the tax cuts may have helped you. We're saying that for America to get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good.” Hello socialism!!!!
Sunday, February 24, 2008
Politics
2/25/08 Politics
President Mahmoud Ahmadinejad called on the U.S. and its allies Saturday to "apologize" for accusing Iran of seeking nuclear weapons, a day after the U.N. nuclear watchdog released its latest report on Iran. Mr. Ahmadinejad said the International Atomic Energy Agency report vindicated Iran and warned that Tehran would take unspecified "decisive reciprocal measures" against any country that imposed additional sanctions against Iran. In addition, Iran said Sunday that it has started using new centrifuges that can churn out enriched uranium at more than double the rate of the machines that now form the backbone of the Islamic nation's nuclear program.
Mike Burk: "Although the market is likely to retest the January lows in the near future, it is unlikely the new low indicators will confirm the retest...The persistently high levels of downside volume suggest there will be more downside price movement...Historically the secondaries have had a positive seasonal bias over the coming week during the 4th year of the Presidential Cycle. By all other seasonal measures the week has been flat...I expect the major indices to be lower on Friday February 29 than they were on Friday February 22."
Tim Wood: "According to Dow's theory, on November 21, 2007 the Primary Trend was confirmed as being bearish. I can assure you that nothing has occurred to negate this bearish trend."
"Central banks have only two tools," says Satyajit Das, author of "Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives," who has emerged as a voice of concern. "They can cut interest rates or they can regulate banks. But these are very old-fashioned tools, and are completely inadequate to the problems now confronting them."
Hours after chiding Congress for not finishing a wiretapping bill and leaving the nation 'vulnerable to terrorist attack,' officials acknowledge all requested information is being received.
Fannie Mae and Freddie Mac are expected to post big quarterly losses.
Jeff Bezos sold 1.85 million Amazon shares on Feb. 15 at $73.21 apiece — for $135.4 million. The sale leaves Bezos with 99.3 million shares, still nearly a quarter of Amazon's total.
China, which is expected to have 10 percent economic growth this year, will stick with a tight monetary policy as controlling inflation remains a top priority, the vice governor of the People's Bank of China said.
The central bank will boost open-market operations and increase the required reserve ratios for commercial banks to ``vigorously'' soak up liquidity, Yi Gang said today at an economic forum in Beijing. The central bank will select an ``optimal'' tightening package out of currency, interest-rate and money-supply measures, he said.
Northern Trust Corp. disclosed Friday that it has agreed to provide as much as $229 million in financial backing to help shield investment funds it sponsors from potential losses caused by two troubled structured investment vehicles.
McDonald's coffee offensive, which also includes smoothies, frappes and bottled drinks, entails an investment of up to $100,000 per restaurant, including $25,000 for equipment and up to $75,000 for remodeling. Essentially, operators must add a special "beverage cell" to one end of their counters near the drive-through window. The cell will house coffee and smoothie equipment and will be staffed by one worker. It will be highly automated, so McDonald's won't offer the coffee customization level of Starbucks. Specialty coffee drinks cost about 25 percent less than they do at Starbucks.
More first-time voters than ever are getting ready to cast their ballots in Texas, driven to the polls by a tight Democratic race. Many are students and that should enhance the chance for Barack Obama to pull out a win, plus the advantage in the caucus, and the votes that shall be cast by Independents.
Ayn Rand: “Why do they always teach us that it's easy and evil to do what we want and that we need discipline to restrain ourselves? It's the hardest thing in the world--to do what we want. And it takes the greatest kind of courage. I mean, what we really want.”
A recent Obama advertisement mailed out to voters in Alaska and perhaps elsewhere carried this headline: "8 years of the Clintons, major losses for Democrats across the nation." The mail piece said the Democrats lost 12 governors, seven senators and 46 congressmen during the Clinton White House years.
"Unless you're building from the ground up and broadening the appeal of the party to independents and even some disaffected Republicans ... we're not going to be able to get things done," Obama said. "I think we have been able to get folks in every state that we've campaigned in to take a second look at the Democratic Party."
Ralph Nader is launching a third-party campaign for president. The consumer advocate made the announcement Sunday on NBC's "Meet the Press."
The national average price for gasoline rose 16 cents per gallon over the past two weeks, an industry survey shows. According to the Lundberg Survey, the average price of self-serve regular gasoline on Friday was $3.10 per gallon, the Associated Press reported.
Electronic Arts Inc. made a all-cash bid of $2 billion for Take-Two Interactive Software Inc. despite earlier rebuffs from the company. The offer of $26 per share represents a premium of 64% to Take-Two's share price on Feb. 15, the last day before EA sents its revised takeover proposal to TakeTwo, and was an increase from their initial $25 offer.
Tiger Woods won his fifth straight tournament and captured his 15th World Golf Championship, holding all three world titles for the first time. He has set the tournament record for margin of victory in his last three wins.
Brett Steenbarger: "We're seeing more hitting of bids than lifting of offers among the broad list of NYSE issues. This is in marked contrast to the NYSE TICK strength that we saw off the January lows. It is difficult to imagine sustaining anything other than sharp, short-covering rallies when selling sentiment remains so dominant."
Democratic Party Chairman Howard Dean accused Republican presidential front-runner John McCain of trying to skirt campaign finance laws Sunday by trying to opt out of public financing for his primary campaign.
Satyajit Das: "Don't confuse credit with liquidity"
President Mahmoud Ahmadinejad called on the U.S. and its allies Saturday to "apologize" for accusing Iran of seeking nuclear weapons, a day after the U.N. nuclear watchdog released its latest report on Iran. Mr. Ahmadinejad said the International Atomic Energy Agency report vindicated Iran and warned that Tehran would take unspecified "decisive reciprocal measures" against any country that imposed additional sanctions against Iran. In addition, Iran said Sunday that it has started using new centrifuges that can churn out enriched uranium at more than double the rate of the machines that now form the backbone of the Islamic nation's nuclear program.
Mike Burk: "Although the market is likely to retest the January lows in the near future, it is unlikely the new low indicators will confirm the retest...The persistently high levels of downside volume suggest there will be more downside price movement...Historically the secondaries have had a positive seasonal bias over the coming week during the 4th year of the Presidential Cycle. By all other seasonal measures the week has been flat...I expect the major indices to be lower on Friday February 29 than they were on Friday February 22."
Tim Wood: "According to Dow's theory, on November 21, 2007 the Primary Trend was confirmed as being bearish. I can assure you that nothing has occurred to negate this bearish trend."
"Central banks have only two tools," says Satyajit Das, author of "Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives," who has emerged as a voice of concern. "They can cut interest rates or they can regulate banks. But these are very old-fashioned tools, and are completely inadequate to the problems now confronting them."
Hours after chiding Congress for not finishing a wiretapping bill and leaving the nation 'vulnerable to terrorist attack,' officials acknowledge all requested information is being received.
Fannie Mae and Freddie Mac are expected to post big quarterly losses.
Jeff Bezos sold 1.85 million Amazon shares on Feb. 15 at $73.21 apiece — for $135.4 million. The sale leaves Bezos with 99.3 million shares, still nearly a quarter of Amazon's total.
China, which is expected to have 10 percent economic growth this year, will stick with a tight monetary policy as controlling inflation remains a top priority, the vice governor of the People's Bank of China said.
The central bank will boost open-market operations and increase the required reserve ratios for commercial banks to ``vigorously'' soak up liquidity, Yi Gang said today at an economic forum in Beijing. The central bank will select an ``optimal'' tightening package out of currency, interest-rate and money-supply measures, he said.
Northern Trust Corp. disclosed Friday that it has agreed to provide as much as $229 million in financial backing to help shield investment funds it sponsors from potential losses caused by two troubled structured investment vehicles.
McDonald's coffee offensive, which also includes smoothies, frappes and bottled drinks, entails an investment of up to $100,000 per restaurant, including $25,000 for equipment and up to $75,000 for remodeling. Essentially, operators must add a special "beverage cell" to one end of their counters near the drive-through window. The cell will house coffee and smoothie equipment and will be staffed by one worker. It will be highly automated, so McDonald's won't offer the coffee customization level of Starbucks. Specialty coffee drinks cost about 25 percent less than they do at Starbucks.
More first-time voters than ever are getting ready to cast their ballots in Texas, driven to the polls by a tight Democratic race. Many are students and that should enhance the chance for Barack Obama to pull out a win, plus the advantage in the caucus, and the votes that shall be cast by Independents.
Ayn Rand: “Why do they always teach us that it's easy and evil to do what we want and that we need discipline to restrain ourselves? It's the hardest thing in the world--to do what we want. And it takes the greatest kind of courage. I mean, what we really want.”
A recent Obama advertisement mailed out to voters in Alaska and perhaps elsewhere carried this headline: "8 years of the Clintons, major losses for Democrats across the nation." The mail piece said the Democrats lost 12 governors, seven senators and 46 congressmen during the Clinton White House years.
"Unless you're building from the ground up and broadening the appeal of the party to independents and even some disaffected Republicans ... we're not going to be able to get things done," Obama said. "I think we have been able to get folks in every state that we've campaigned in to take a second look at the Democratic Party."
Ralph Nader is launching a third-party campaign for president. The consumer advocate made the announcement Sunday on NBC's "Meet the Press."
The national average price for gasoline rose 16 cents per gallon over the past two weeks, an industry survey shows. According to the Lundberg Survey, the average price of self-serve regular gasoline on Friday was $3.10 per gallon, the Associated Press reported.
Electronic Arts Inc. made a all-cash bid of $2 billion for Take-Two Interactive Software Inc. despite earlier rebuffs from the company. The offer of $26 per share represents a premium of 64% to Take-Two's share price on Feb. 15, the last day before EA sents its revised takeover proposal to TakeTwo, and was an increase from their initial $25 offer.
Tiger Woods won his fifth straight tournament and captured his 15th World Golf Championship, holding all three world titles for the first time. He has set the tournament record for margin of victory in his last three wins.
Brett Steenbarger: "We're seeing more hitting of bids than lifting of offers among the broad list of NYSE issues. This is in marked contrast to the NYSE TICK strength that we saw off the January lows. It is difficult to imagine sustaining anything other than sharp, short-covering rallies when selling sentiment remains so dominant."
Democratic Party Chairman Howard Dean accused Republican presidential front-runner John McCain of trying to skirt campaign finance laws Sunday by trying to opt out of public financing for his primary campaign.
Satyajit Das: "Don't confuse credit with liquidity"
Saturday, February 23, 2008
The Thursday Night Debate
2/23/08 The Thursday Night Debate
Hillary Clinton: "Whatever happens, we're going to be fine. You know, we have strong support from our families and our friends," she said, looking at Obama sitting next to her. "I just hope that we'll be able to say the same thing about the American people, and that's what this election should be about." Sound familiar?
It should.
John Edwards: "All of us are going to be just fine no matter what happens in this election. But what's at stake is whether America is going to be fine."
Xerox that, Hillary!
More than 20,000 U.S. citizens living abroad voted in the primary, which ran from Feb. 5 to Feb. 12. Obama won about 65 percent of the vote, according to the results released yesterday. Voters living in 164 countries cast votes online, while expatriates voted in person in more than 30 countries, at hotels in Australia and Costa Rica, at a pub in Ireland and at a Starbucks in Thailand. The results took about a week to tabulate as committees around the globe gathered ballots.
According to the NY Times, "Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings. Several of them, echoing political analysts, expressed concerns that Mrs. Clinton’s spending priorities amounted to costly errors in judgment that have hamstrung her competitiveness against Senator Barack Obama of Illinois.“We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,” said a prominent New York donor. “So much about her campaign needs to change — but it may be too late.”
According to the Washington Post, the nation's top federal election official told Sen. John McCain yesterday that he cannot immediately withdraw from the presidential public financing system as he had requested, a decision that threatens to dramatically restrict his spending until the general election campaign begins in the fall.
Nouriel Roubini: "Needless to say the latest macro news (the Philly Fed report) and financial news (increase in corporate bankruptcies and LBOs going belly up, monoline deeper mess, trouble in the muni bonds markets, credit spreads widening, etc.) confirm my analysis that the risk of a systemic financial crisis is rising."
Brad Setser: "Some key findings of the latest Pew Survey: Fully 58% of the public says that their incomes are falling behind the rising cost of living. Overall, 24% cite concerns over prices -- with the cost of energy and healthcare mentioned most frequently -- as the most important problem facing the country. Substantial numbers of people with very low annual incomes -- less than $20,000 a year -- say they have difficulty affording basic necessities. Nearly three-quarters (74%) say they have difficulty affording gasoline, 65% report problems affording heat and electricity, and half have trouble affording food. The recent rise in the percentage of Americans who say that their incomes are falling behind the cost of living has come largely among middle-income and poor people. Roughly seven-in-ten (71%) of those with household incomes of less than $50,000 a year say their incomes are falling behind the cost of living, up 16 points since last September. By contrast, only a third (33%) of those with household incomes of $100,000 a year or more say their incomes are not keeping pace with the cost of living, up modestly since September (four points)."
California's nonpartisan fiscal watchdog on Wednesday said the state's budget shortfall has grown to $16 billion and offered an unprecedented and competing plan to close the gap by imposing both spending cuts and tax increases.
According to the NY Times, with the collapse of the housing boom, the government is considering proposals to rescue the nearly 8.8 million homeowners, or 10.3 percent of the total, who are underwater.
As of last Friday, natural gas in storage had fallen for a second consecutive week vs year ago levels. This past week there was a draw down of 172 billion cubic feet. As of last Tuesday there was a record short position in NYMEX natural gas futures and options. By comparison, let's consider that Turkey is paying record prices for individual or spot liquefied natural gas cargoes after Iran slashed exports through a natural gas pipeline, according to energy consultant FACTS Inc. The country is paying between $17 and $18 per million British thermal units for LNG, natural gas chilled for transport by tankers, for immediate delivery this month, Siamak Adibi, a FACTS analyst, said in a report dated February, without elaborating. The price is more than double the U.S. benchmark at Henry Hub, Louisiana. Iran halted gas exports to Turkey after record low temperatures boosted domestic demand, Facts said.
The premium of ICE gas oil futures to Brent crude, known in the industry as cracks, rose as high as $19.890 a barrel, the strongest level since mid-October 2005, a sign that supply of the product is tight at a time of intensifying cold weather.
Brett Steenbarger: "Interestingly, although we saw weakness in Thursday's trade, we had more stocks register new 20-day highs (848) and fewer register new lows (736) than the day prior."
Winter storms in the U.S. Northeast are causing airline delays and cancellations Friday morning.
In 2007, the median age for a car moved up to 7.1 years. People are keeping their cars longer.
The head of Nissan Motor Co. said even if the United States is not in recession, its auto industry is.
According to Bloomberg, Chinese steelmakers, the largest buyers of iron ore, will reject Rio Tinto Group's demand for a minimum 71 percent price increase in the raw material, two people familiar with the negotiations said. The mills will only accept a 65 percent price gain for ore from London-based Rio's mines in Australia, said the people, who declined to be identified because the talks are confidential.
Asian aframax rates rose for an eighth day, bolstered by increasing cargoes for March delivery and expectations by owners that demand for bigger tankers will spill over to smaller vessels.
Merrill Lynch & Co. advised clients to sell shares of Fannie Mae and Freddie Mac because the worst housing market in a quarter century will stifle earnings through 2011.
Investors should buy Malaysia's ringgit against the dollar as Malaysia's economy is likely to be less affected than other Asian nations by a U.S. economic slowdown, according to Morgan Stanley.
According to Reuters, EMC Corp, the world's biggest maker of corporate storage computing gear, said on Thursday it was hiring former Microsoft Corp executive Paul Maritz to run a division to develop services delivered over the Web. EMC also said it will buy Pi Corp, a privately held start-up founded by Maritz. It did not disclose the purchase price. Pi Corp. is based in Seattle and is privately owned. The software development company employs about 100 engineers in the U.S., Montreal and Bangalore, India. Maritz will be president and general manager of EMC's new Cloud Infrastructure and Services Division. The unit will focus on "cloud computing," a term that describes services accessed over the Web that seem to exist in a cloud of the Internet.
Cleveland-Cliffs Inc. said Thursday its fourth-quarter earnings rose 35 percent, led by domestic iron ore sales and revenue from recently acquired coal mines. The company earned $92.7 million, or $1.77 per share, compared with $68.6 million, or $1.33 per share, in the year-ago quarter. Revenue surged 43 percent to $782.5 million, from $549 million in the prior-year period.
The Turkish military says it has launched a land offensive across the border into northern Iraq to attack suspected Kurdish rebels.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos. may earn 40 percent less profit than estimated in the first quarter because of lower investment banking revenue, said Sanford C. Bernstein & Co. Morgan Stanley may report 12 percent less profit, according to New-York based analyst Brad Hintz, who also cited ``challenging'' fixed income markets for reduced earnings.
S&P cut GMAC three notches to B+ and Residential Capital four notches to B, the ratings agency said in a statement. It said the ratings outlook for both companies was negative, suggesting further downward pressure.
The big Nasdaq stocks were under particular selling pressure in the early going on Friday. Google, Apple, RIMM, Microsoft, Oracle, Intel, Cisco, EMC and others. After tax-prep software company Intuit Inc. reported weak fiscal second-quarter revenue and cut its full-year forecast, the stock took the largest midday fall Friday on the Nasdaq 100 index. The weakness in this sector may prove an attractive entry point and/or a spot to add within this air pocket.
Starbucks cuts 600 positions.
Soybeans for May delivery jumped 9.25 cents to fetch $14.34 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $14.375 a bushel.
Crude for April delivery rose 58 cents, or 0.6%, to close at $98.81 a barrel on the New York Mercantile Exchange. Natural gas jumped to $9.19. Gold for April delivery dropped $1.40 to end at $947.80 an ounce on Nymex. Gold, however, gained $41.70 this week from last Friday's closing level of $906.10.
Thirty-three percent of homeowners reported that their home had lost value in February, compared with 16 percent in February 2007 and well above the 24 percent peak recorded in 1992.
Genentech Inc. said late Friday that the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer.
Ambac Financial shares jumped more than 18% in afternoon trading on Friday after CNBC reported that a plan by several big banks to bailout the struggling bond insurer could be unveiled on Monday or Tuesday.
Hillary Clinton: "Whatever happens, we're going to be fine. You know, we have strong support from our families and our friends," she said, looking at Obama sitting next to her. "I just hope that we'll be able to say the same thing about the American people, and that's what this election should be about." Sound familiar?
It should.
John Edwards: "All of us are going to be just fine no matter what happens in this election. But what's at stake is whether America is going to be fine."
Xerox that, Hillary!
More than 20,000 U.S. citizens living abroad voted in the primary, which ran from Feb. 5 to Feb. 12. Obama won about 65 percent of the vote, according to the results released yesterday. Voters living in 164 countries cast votes online, while expatriates voted in person in more than 30 countries, at hotels in Australia and Costa Rica, at a pub in Ireland and at a Starbucks in Thailand. The results took about a week to tabulate as committees around the globe gathered ballots.
According to the NY Times, "Senator Hillary Rodham Clinton’s latest campaign finance report, published Wednesday night, appeared even to her most stalwart supporters and donors to be a road map of her political and management failings. Several of them, echoing political analysts, expressed concerns that Mrs. Clinton’s spending priorities amounted to costly errors in judgment that have hamstrung her competitiveness against Senator Barack Obama of Illinois.“We didn’t raise all of this money to keep paying consultants who have pursued basically the wrong strategy for a year now,” said a prominent New York donor. “So much about her campaign needs to change — but it may be too late.”
According to the Washington Post, the nation's top federal election official told Sen. John McCain yesterday that he cannot immediately withdraw from the presidential public financing system as he had requested, a decision that threatens to dramatically restrict his spending until the general election campaign begins in the fall.
Nouriel Roubini: "Needless to say the latest macro news (the Philly Fed report) and financial news (increase in corporate bankruptcies and LBOs going belly up, monoline deeper mess, trouble in the muni bonds markets, credit spreads widening, etc.) confirm my analysis that the risk of a systemic financial crisis is rising."
Brad Setser: "Some key findings of the latest Pew Survey: Fully 58% of the public says that their incomes are falling behind the rising cost of living. Overall, 24% cite concerns over prices -- with the cost of energy and healthcare mentioned most frequently -- as the most important problem facing the country. Substantial numbers of people with very low annual incomes -- less than $20,000 a year -- say they have difficulty affording basic necessities. Nearly three-quarters (74%) say they have difficulty affording gasoline, 65% report problems affording heat and electricity, and half have trouble affording food. The recent rise in the percentage of Americans who say that their incomes are falling behind the cost of living has come largely among middle-income and poor people. Roughly seven-in-ten (71%) of those with household incomes of less than $50,000 a year say their incomes are falling behind the cost of living, up 16 points since last September. By contrast, only a third (33%) of those with household incomes of $100,000 a year or more say their incomes are not keeping pace with the cost of living, up modestly since September (four points)."
California's nonpartisan fiscal watchdog on Wednesday said the state's budget shortfall has grown to $16 billion and offered an unprecedented and competing plan to close the gap by imposing both spending cuts and tax increases.
According to the NY Times, with the collapse of the housing boom, the government is considering proposals to rescue the nearly 8.8 million homeowners, or 10.3 percent of the total, who are underwater.
As of last Friday, natural gas in storage had fallen for a second consecutive week vs year ago levels. This past week there was a draw down of 172 billion cubic feet. As of last Tuesday there was a record short position in NYMEX natural gas futures and options. By comparison, let's consider that Turkey is paying record prices for individual or spot liquefied natural gas cargoes after Iran slashed exports through a natural gas pipeline, according to energy consultant FACTS Inc. The country is paying between $17 and $18 per million British thermal units for LNG, natural gas chilled for transport by tankers, for immediate delivery this month, Siamak Adibi, a FACTS analyst, said in a report dated February, without elaborating. The price is more than double the U.S. benchmark at Henry Hub, Louisiana. Iran halted gas exports to Turkey after record low temperatures boosted domestic demand, Facts said.
The premium of ICE gas oil futures to Brent crude, known in the industry as cracks, rose as high as $19.890 a barrel, the strongest level since mid-October 2005, a sign that supply of the product is tight at a time of intensifying cold weather.
Brett Steenbarger: "Interestingly, although we saw weakness in Thursday's trade, we had more stocks register new 20-day highs (848) and fewer register new lows (736) than the day prior."
Winter storms in the U.S. Northeast are causing airline delays and cancellations Friday morning.
In 2007, the median age for a car moved up to 7.1 years. People are keeping their cars longer.
The head of Nissan Motor Co. said even if the United States is not in recession, its auto industry is.
According to Bloomberg, Chinese steelmakers, the largest buyers of iron ore, will reject Rio Tinto Group's demand for a minimum 71 percent price increase in the raw material, two people familiar with the negotiations said. The mills will only accept a 65 percent price gain for ore from London-based Rio's mines in Australia, said the people, who declined to be identified because the talks are confidential.
Asian aframax rates rose for an eighth day, bolstered by increasing cargoes for March delivery and expectations by owners that demand for bigger tankers will spill over to smaller vessels.
Merrill Lynch & Co. advised clients to sell shares of Fannie Mae and Freddie Mac because the worst housing market in a quarter century will stifle earnings through 2011.
Investors should buy Malaysia's ringgit against the dollar as Malaysia's economy is likely to be less affected than other Asian nations by a U.S. economic slowdown, according to Morgan Stanley.
According to Reuters, EMC Corp, the world's biggest maker of corporate storage computing gear, said on Thursday it was hiring former Microsoft Corp executive Paul Maritz to run a division to develop services delivered over the Web. EMC also said it will buy Pi Corp, a privately held start-up founded by Maritz. It did not disclose the purchase price. Pi Corp. is based in Seattle and is privately owned. The software development company employs about 100 engineers in the U.S., Montreal and Bangalore, India. Maritz will be president and general manager of EMC's new Cloud Infrastructure and Services Division. The unit will focus on "cloud computing," a term that describes services accessed over the Web that seem to exist in a cloud of the Internet.
Cleveland-Cliffs Inc. said Thursday its fourth-quarter earnings rose 35 percent, led by domestic iron ore sales and revenue from recently acquired coal mines. The company earned $92.7 million, or $1.77 per share, compared with $68.6 million, or $1.33 per share, in the year-ago quarter. Revenue surged 43 percent to $782.5 million, from $549 million in the prior-year period.
The Turkish military says it has launched a land offensive across the border into northern Iraq to attack suspected Kurdish rebels.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos. may earn 40 percent less profit than estimated in the first quarter because of lower investment banking revenue, said Sanford C. Bernstein & Co. Morgan Stanley may report 12 percent less profit, according to New-York based analyst Brad Hintz, who also cited ``challenging'' fixed income markets for reduced earnings.
S&P cut GMAC three notches to B+ and Residential Capital four notches to B, the ratings agency said in a statement. It said the ratings outlook for both companies was negative, suggesting further downward pressure.
The big Nasdaq stocks were under particular selling pressure in the early going on Friday. Google, Apple, RIMM, Microsoft, Oracle, Intel, Cisco, EMC and others. After tax-prep software company Intuit Inc. reported weak fiscal second-quarter revenue and cut its full-year forecast, the stock took the largest midday fall Friday on the Nasdaq 100 index. The weakness in this sector may prove an attractive entry point and/or a spot to add within this air pocket.
Starbucks cuts 600 positions.
Soybeans for May delivery jumped 9.25 cents to fetch $14.34 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $14.375 a bushel.
Crude for April delivery rose 58 cents, or 0.6%, to close at $98.81 a barrel on the New York Mercantile Exchange. Natural gas jumped to $9.19. Gold for April delivery dropped $1.40 to end at $947.80 an ounce on Nymex. Gold, however, gained $41.70 this week from last Friday's closing level of $906.10.
Thirty-three percent of homeowners reported that their home had lost value in February, compared with 16 percent in February 2007 and well above the 24 percent peak recorded in 1992.
Genentech Inc. said late Friday that the U.S. Food and Drug Administration granted an accelerated approval for Avastin, in combination with paclitaxel chemotherapy, for the treatment of patients who have not received chemotherapy for their metastatic breast cancer.
Ambac Financial shares jumped more than 18% in afternoon trading on Friday after CNBC reported that a plan by several big banks to bailout the struggling bond insurer could be unveiled on Monday or Tuesday.
Friday, February 22, 2008
Inflation
2/22/08 Inflation
David Fry: " Inflation is officially at 4%, but pre-Clinton era methodology shows the real number closer to 8%."
Robert McHugh: "Stocks are very close to a sharp breakout from their recent Symmetrical Triangle sideways moves. The breakout should be at least a 4 to 5 percent move, lasting several weeks."
China's gold demand rose 26% in 2007 from a year earlier, according to a wire report citing figures from the World Gold Council and the Shanghai Gold Exchange Thursday.
Taiwan has frozen exports of some steel products used in construction amid growing concerns about rising prices for the alloy, according to Dow Jones Newswires, which cited a statement by the Ministry of Economic Affairs. The export ban will affect steel billets and steel bars and will go into effect in about two weeks.
U.K. publishing group Reed Elsevier agreed to buy ChoicePoint Inc for a total cost of $4.1 billion, including the assumption of $600 million of debt. Reed said it will pay $50 a share for ChoicePoint, which provides data and analytics to the insurance industry. The deal has been recommended by the ChoicePoint board and represents a 49% premium to the closing price of $33.66 a share on Wednesday.
The value of Japanese exports surged 7.7% in January as rising shipments to Europe, Asia and commodity-rich countries offset slowing orders from the U.S.
Allianz's net profit dropped by more than half in the fourth quarter, as strength in its main property-casualty insurance business could not offset the damage from subprime write-downs at its banking arm. Its Dresdner Bank unit announced on Thursday it was cutting back on its activity in structured investment vehicles (SIV) and other structured products, at the root of the crisis, and cutting 450 jobs, though most of these have already been carried out. Dresdner Bank AG, Germany's third- largest bank, agreed to rescue its $18.8 billion K2 structured investment vehicle.
Pharmaceutical companies increased wholesale prices for the 50 top-selling branded drugs by an average of 7.82% in 2007, after increases of 6.73% and 6.22% in the previous two years, according to Delta Marketing Dynamics Inc., a health-care marketing research company. The most recent increase is almost double the overall U.S. economy's 4.1% annual inflation rate last year.
Silver gained to 27-year high.
The cost of protecting the debt of US and European companies against default surged to all-time highs.
McCormick & Company bought Canada’s largest honey company for $75 million in cash, about two times Billy Bee Honey Products’s annual sales of $37 million.
BNP Paribas , one of the largest banks in France, reported a 42 percent decline in fourth-quarter profit after writing down the value of securities hurt by worsening credit markets. Alliance & Leicester of Britain warned that a big rise in financing costs would derail 2008 profit after a write-down on risky assets hit 2007 results.
Bruce Everiss: Microsoft said that in the future XNA will be available for Zune. So now we know that Zune will evolve into a mobile gaming platform.
Research in Motion raised its subscriber forecasts this morning, and now expects its net subscriber additions for its fourth quarter to be approximately 15% to 20% higher than the 1.82 million net subscriber account additions forecast on December 20, 2007.
Crude oil prices of $100 may look ``cheap'' within five years if OPEC production fails to keep pace with global demand growth, according to Alfa Bank.
Search market share: Google 58.5%, Yahoo 22.2%, and Microsoft 9.8%.
J.C. Penney says its fourth-quarter profit fell 10 percent due to a shorter quarter. It also predicts 2008 earnings below Wall Street expectations, amid a weak consumer spending environment.
Microsoft announced a new initiative Wednesday to allow amateur developers to build games for Xbox Live, an online network with more than 10 million subscribers. The development tools for these games also allow them to be run on a PC and, eventually, Microsoft's portable digital media player, Zune. With the addition of these "community-created games," Microsoft expects to have more than 1,000 titles available for the Xbox 360 by the end of the year, said John Schappert, a Microsoft corporate vice president leading the effort.
KLA-Tencor Corp. said Thursday it intends to buy Belgian chip packaging testing company ICOS Vision Systems Corp. NV, for around $465.8 million.
For 2008, Williams Companies raised its profit guidance to $1.60 to $2 a share from $1.50 to $1.90 a share. For 2009, the company forecast profit in the range of $1.70 to $2.20 a share. At year-end 2007, it had replaced 232% of its production for the year.
In early Thursday trading, April gold is up $11.60 at $949.40 an ounce on the Nymex. April platinum futures also hit a record high of $2,194.80 an ounce and were last trading up $26.30 at $2,165.10 an ounce.
Barrick also entered into an agreement with Kennecott Explorations Ltd., a Rio Tinto plc subsidiary, to purchase a 40% stake in the Cortez Joint Venture for $1.7 billion.
The number of initial claims in the week ending Feb. 16 fell 9,000 to 349,000. It's the lowest level since the week ended Jan. 19. Claims in the previous week were revised to an increase of 1,000 to 358,000 compared with the initial estimate of a fall of 9,000 to 348,000. The four-week average of initial claims rose 10,750 to 360,500. A Labor Department official said that a state holiday in California may have reduced claims in the latest week. Meanwhile, the number of Americans receiving state jobless benefits rose 48,000 to 2.78 million in the week ending Feb. 9. The four-week moving average of continuing claims rose 28,750 to 2.75 million.
Microsoft Corp expects its sales to Taiwan's contract manufacturers of PCs, including Quanta and Asustek , to rise more than 10 percent in 2008, the head of its Taiwan unit said on Thursday.
The index of leading U.S. economic indicators dropped by 0.1% in January, the Conference Board reported Thursday, as weaker stock prices and housing data drove the index's fourth consecutive decline.
The Philly Fed diffusion index fell to -24 in February. The index had plunged to -20.9 in January from -1.6 in December. Readings below zero indicate contraction. The decline was unexpected. The new orders index rose to -10.9 from -15.2, while the shipments index fell to -12.2 from -2.3. Inflationary pressures eased a bit. The prices paid index dropped to 46.6 from 49.8.
The Eurekahedge Hedge Fund Index, which tracks the performance of 2,467 funds that invest globally, dropped 3.3 percent, based on preliminary figures, according to the Singapore-based hedge-fund research and publishing company. The drop is the worst since January 2000, when Eurekahedge began compiling the data. The index rose 0.7 percent in December.
The U.S. dollar index was at 75.940, down from 76.143 late Wednesday.
U.S. crude inventories rose more than expected, up 4.2 million barrels to 305.3 million barrels in the week ending Feb. 15, U.S. Energy Information Administration reported on Thursday. Analysts surveyed by Platts expected a rise of 3.2 million barrels. After the data, crude-oil futures for April delivery fell 90 cents, or 0.9%, to $98.80 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 1.1 million barrels in the latest week, while distillate stocks fell by 4.5 million barrels, EIA reported.
At the end of 2007, Marathon said it had net proved liquid hydrocarbon and natural gas reserves equal to 1.23 billion barrels of oil. About 53 percent was liquid and the rest gas, the company said.
A tight market for polysilicon has limited the solar-power industry's ability to produce more.
Goldman Sachs is likely to cut 1,500 employees, Lehman another 200, and Merrill an amount yet to be disclosed.
Crude for April delivery, the new front-month contract, declined $1.47 to settle at $98.23 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $11.40 to end at $949.20 an ounce on the New York Mercantile Exchange. April platinum futures also hit a record Thursday, climbing as high as $2,194.80 an ounce. Platinum finished up $49.40 at $2,188.20 an ounce.
Fitch Ratings said it sees about $7 billion to $8 billion in losses in the U.S. life insurance industry because of exposure to subprime and Alt-A residential mortgages.
Microsoft announced it will be publishing technical information about its products to ensure interoperability with rivals' offerings. It won't make software developers obtain a license or pay royalties or other fees.
Beijing has given the green light for domestic banks to invest client funds in the Japanese stock market, according to a Dow Jones Newswire report Friday, citing a statement by the China Banking Regulatory Commission.
The People's Bank of China said Friday it expects growth in consumer prices to remain elevated in the first half, and warned inflationary pressures could keep on an upward trajectory for an extended period. The central bank also said the rate of growth in the economy was likely to slow this year. The PBOC said it would use interest rates to cool demand growth and quell inflation while bank reserve ratios could be increased to help manage liquidity.
Japan lowered its assessment of the economy for the first time in 15 months in its February report, noting a host of indicators were pointing to weaker economic growth.
In 2008, Express Scripts expects earnings from continuing operations in a range of $2.92 to $3 a share.
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$4.197 billion in the week ended 2/20/08 with Domestic funds reporting net outflows of -$5.853 billion and Non-domestic funds reporting net inflows of $1.656 billion; Excluding ETF activity, Equity funds report net cash inflows totaling $167 million with Domestic funds reporting net inflows of $141 million and Non-domestic funds reporting net inflows totaling $25 million.
David Fry: " Inflation is officially at 4%, but pre-Clinton era methodology shows the real number closer to 8%."
Robert McHugh: "Stocks are very close to a sharp breakout from their recent Symmetrical Triangle sideways moves. The breakout should be at least a 4 to 5 percent move, lasting several weeks."
China's gold demand rose 26% in 2007 from a year earlier, according to a wire report citing figures from the World Gold Council and the Shanghai Gold Exchange Thursday.
Taiwan has frozen exports of some steel products used in construction amid growing concerns about rising prices for the alloy, according to Dow Jones Newswires, which cited a statement by the Ministry of Economic Affairs. The export ban will affect steel billets and steel bars and will go into effect in about two weeks.
U.K. publishing group Reed Elsevier agreed to buy ChoicePoint Inc for a total cost of $4.1 billion, including the assumption of $600 million of debt. Reed said it will pay $50 a share for ChoicePoint, which provides data and analytics to the insurance industry. The deal has been recommended by the ChoicePoint board and represents a 49% premium to the closing price of $33.66 a share on Wednesday.
The value of Japanese exports surged 7.7% in January as rising shipments to Europe, Asia and commodity-rich countries offset slowing orders from the U.S.
Allianz's net profit dropped by more than half in the fourth quarter, as strength in its main property-casualty insurance business could not offset the damage from subprime write-downs at its banking arm. Its Dresdner Bank unit announced on Thursday it was cutting back on its activity in structured investment vehicles (SIV) and other structured products, at the root of the crisis, and cutting 450 jobs, though most of these have already been carried out. Dresdner Bank AG, Germany's third- largest bank, agreed to rescue its $18.8 billion K2 structured investment vehicle.
Pharmaceutical companies increased wholesale prices for the 50 top-selling branded drugs by an average of 7.82% in 2007, after increases of 6.73% and 6.22% in the previous two years, according to Delta Marketing Dynamics Inc., a health-care marketing research company. The most recent increase is almost double the overall U.S. economy's 4.1% annual inflation rate last year.
Silver gained to 27-year high.
The cost of protecting the debt of US and European companies against default surged to all-time highs.
McCormick & Company bought Canada’s largest honey company for $75 million in cash, about two times Billy Bee Honey Products’s annual sales of $37 million.
BNP Paribas , one of the largest banks in France, reported a 42 percent decline in fourth-quarter profit after writing down the value of securities hurt by worsening credit markets. Alliance & Leicester of Britain warned that a big rise in financing costs would derail 2008 profit after a write-down on risky assets hit 2007 results.
Bruce Everiss: Microsoft said that in the future XNA will be available for Zune. So now we know that Zune will evolve into a mobile gaming platform.
Research in Motion raised its subscriber forecasts this morning, and now expects its net subscriber additions for its fourth quarter to be approximately 15% to 20% higher than the 1.82 million net subscriber account additions forecast on December 20, 2007.
Crude oil prices of $100 may look ``cheap'' within five years if OPEC production fails to keep pace with global demand growth, according to Alfa Bank.
Search market share: Google 58.5%, Yahoo 22.2%, and Microsoft 9.8%.
J.C. Penney says its fourth-quarter profit fell 10 percent due to a shorter quarter. It also predicts 2008 earnings below Wall Street expectations, amid a weak consumer spending environment.
Microsoft announced a new initiative Wednesday to allow amateur developers to build games for Xbox Live, an online network with more than 10 million subscribers. The development tools for these games also allow them to be run on a PC and, eventually, Microsoft's portable digital media player, Zune. With the addition of these "community-created games," Microsoft expects to have more than 1,000 titles available for the Xbox 360 by the end of the year, said John Schappert, a Microsoft corporate vice president leading the effort.
KLA-Tencor Corp. said Thursday it intends to buy Belgian chip packaging testing company ICOS Vision Systems Corp. NV, for around $465.8 million.
For 2008, Williams Companies raised its profit guidance to $1.60 to $2 a share from $1.50 to $1.90 a share. For 2009, the company forecast profit in the range of $1.70 to $2.20 a share. At year-end 2007, it had replaced 232% of its production for the year.
In early Thursday trading, April gold is up $11.60 at $949.40 an ounce on the Nymex. April platinum futures also hit a record high of $2,194.80 an ounce and were last trading up $26.30 at $2,165.10 an ounce.
Barrick also entered into an agreement with Kennecott Explorations Ltd., a Rio Tinto plc subsidiary, to purchase a 40% stake in the Cortez Joint Venture for $1.7 billion.
The number of initial claims in the week ending Feb. 16 fell 9,000 to 349,000. It's the lowest level since the week ended Jan. 19. Claims in the previous week were revised to an increase of 1,000 to 358,000 compared with the initial estimate of a fall of 9,000 to 348,000. The four-week average of initial claims rose 10,750 to 360,500. A Labor Department official said that a state holiday in California may have reduced claims in the latest week. Meanwhile, the number of Americans receiving state jobless benefits rose 48,000 to 2.78 million in the week ending Feb. 9. The four-week moving average of continuing claims rose 28,750 to 2.75 million.
Microsoft Corp expects its sales to Taiwan's contract manufacturers of PCs, including Quanta and Asustek , to rise more than 10 percent in 2008, the head of its Taiwan unit said on Thursday.
The index of leading U.S. economic indicators dropped by 0.1% in January, the Conference Board reported Thursday, as weaker stock prices and housing data drove the index's fourth consecutive decline.
The Philly Fed diffusion index fell to -24 in February. The index had plunged to -20.9 in January from -1.6 in December. Readings below zero indicate contraction. The decline was unexpected. The new orders index rose to -10.9 from -15.2, while the shipments index fell to -12.2 from -2.3. Inflationary pressures eased a bit. The prices paid index dropped to 46.6 from 49.8.
The Eurekahedge Hedge Fund Index, which tracks the performance of 2,467 funds that invest globally, dropped 3.3 percent, based on preliminary figures, according to the Singapore-based hedge-fund research and publishing company. The drop is the worst since January 2000, when Eurekahedge began compiling the data. The index rose 0.7 percent in December.
The U.S. dollar index was at 75.940, down from 76.143 late Wednesday.
U.S. crude inventories rose more than expected, up 4.2 million barrels to 305.3 million barrels in the week ending Feb. 15, U.S. Energy Information Administration reported on Thursday. Analysts surveyed by Platts expected a rise of 3.2 million barrels. After the data, crude-oil futures for April delivery fell 90 cents, or 0.9%, to $98.80 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 1.1 million barrels in the latest week, while distillate stocks fell by 4.5 million barrels, EIA reported.
At the end of 2007, Marathon said it had net proved liquid hydrocarbon and natural gas reserves equal to 1.23 billion barrels of oil. About 53 percent was liquid and the rest gas, the company said.
A tight market for polysilicon has limited the solar-power industry's ability to produce more.
Goldman Sachs is likely to cut 1,500 employees, Lehman another 200, and Merrill an amount yet to be disclosed.
Crude for April delivery, the new front-month contract, declined $1.47 to settle at $98.23 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $11.40 to end at $949.20 an ounce on the New York Mercantile Exchange. April platinum futures also hit a record Thursday, climbing as high as $2,194.80 an ounce. Platinum finished up $49.40 at $2,188.20 an ounce.
Fitch Ratings said it sees about $7 billion to $8 billion in losses in the U.S. life insurance industry because of exposure to subprime and Alt-A residential mortgages.
Microsoft announced it will be publishing technical information about its products to ensure interoperability with rivals' offerings. It won't make software developers obtain a license or pay royalties or other fees.
Beijing has given the green light for domestic banks to invest client funds in the Japanese stock market, according to a Dow Jones Newswire report Friday, citing a statement by the China Banking Regulatory Commission.
The People's Bank of China said Friday it expects growth in consumer prices to remain elevated in the first half, and warned inflationary pressures could keep on an upward trajectory for an extended period. The central bank also said the rate of growth in the economy was likely to slow this year. The PBOC said it would use interest rates to cool demand growth and quell inflation while bank reserve ratios could be increased to help manage liquidity.
Japan lowered its assessment of the economy for the first time in 15 months in its February report, noting a host of indicators were pointing to weaker economic growth.
In 2008, Express Scripts expects earnings from continuing operations in a range of $2.92 to $3 a share.
According to AMG Data Services, including ETF activity, Equity funds report net cash outflows totaling -$4.197 billion in the week ended 2/20/08 with Domestic funds reporting net outflows of -$5.853 billion and Non-domestic funds reporting net inflows of $1.656 billion; Excluding ETF activity, Equity funds report net cash inflows totaling $167 million with Domestic funds reporting net inflows of $141 million and Non-domestic funds reporting net inflows totaling $25 million.
Wednesday, February 20, 2008
Forbearance
2/21/08 Forbearance
The consumer price index increased 0.4% in January, driven by 0.7% gains in both energy and food prices. But other prices were also higher. The core CPI, which excludes food and energy costs, was up 0.3% in January, the largest gain since June 2006.
George Ure: "The 3-month annualized CPI is now running 6.8!"
Construction on new U.S. homes posted a small gain in January, even as building permits continued a downward slide, the Commerce Department reported Wednesday. Housing starts rose 0.8% to a seasonally adjusted annual rate of 1.01 million, the most since November. In December, starts fell by a revised 14.8% to an annual rate of 1.00 million. Economists were expecting national housing starts to rise to a pace of 1.01 million. Building permits dropped by 3.0%, to a seasonally adjusted annual rate of 1.08 million, the lowest since November 1991.
Sharper Image Corp., the San Francisco retailer, said in a statement Wednesday that it had filed under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware. In addition, Lillian Vernon Corp. filed for bankruptcy,
KKR Financial Holdings has postponed repayment of billions of commercial paper and is holding talks with creditors, according to a published report in the Financial Times Wednesday.
ACA Capital Holdings Inc. entered into a third forbearance agreement with its structured credit and other similarly situated counterparties, the company said late Tuesday. The agreement will remain effective until April 23. Under the agreement, the counterparties will continue to waive all collateral posting requirements, termination rights and policy claims relating to the rating of ACA Financial Guaranty Corporation, ACA Capital's financial guaranty insurance subsidiary, under their respective transaction documents including any credit support annexes and similar agreements.
China's consumer prices in January surged 7.1% from a year earlier.
Microsoft has hired proxy-solicitation group Innisfree M&A to help oust Yahoo's 10-member board, all of whom are up for re-election this year.
It has until March 14 to nominate a slate of directors for Yahoo.
``There are those who would say that you have to be wary about inspiration because you might be disappointed,'' Obama said. ``They say Obama might make a good speech, but what is really going to make a difference is how you work our government. But I have to say that it is my central premise that the only way we will bring about real change in America is if we bring new people into the process.''
In early Wednesday trading natural gas traded at $9.10. Yesterday, two hedge funds folded. Shorting natural gas caused their demise. There will be others to follow.
Rob Hanna: "The market gapped up big today but couldn’t hold on to those gains as the S&P 500, Dow 30, and Nasdaq all finished in the red. Reading financial columns tonight you’ll be told that the inability of the market to hold on to its gains was a bad thing. The large black candlesticks are ugly. Market participants are selling into strength. All of which means there is likely more downside to come. But is any of it true?
I ran a study on the Nasdaq 100 tonight to find instances where the index gapped higher by 1% or more and then closed lower on the day. I wanted to see whether the negativity tended to carry through to the next day or next several days. Here’s what I found.
Going back to 1986, the NDX has had 52 occurrences where the market gapped up over 1% and then finished negative on the day. It closed higher the next day 54% of the time. The chance of the NDX being up on any day over the period was also 54%. Over the next 3 and 5 days the chances of the market being higher were 62% and 65% after a large failed gap up. The NDX has closed higher between 55.5% and 56.5% of the time over all 3 and 5 days periods since 1986. So looking out over three and five days the supposedly negative reversal actually seems to be a positive for the market."
Bain Capital Partners said Wednesday it withdrew its application for U.S. national security approval for its planned $2.2 billion acquisition of network-equipment maker 3Com. The parties remain committed to continuing discussions, it said. 3Com Corp. said it couldn't reach an agreement with a federal oversight panel on national security issues surrounding its proposed $2.2 billion buyout by a private-equity firm and Chinese telecommunications company.
Pfizer to acquire Encysive Pharma for $2.35 a share.
The dollar index was at 76.244, up from 76.043 late Tuesday.
Airbus said Wednesday it expects half as many orders for new planes in 2008 as it got last year after receiving record orders in recent years and amid slower global growth.
GMAC to lay off 930 employees.
The Federal Reserve said on Wednesday it had lowered its growth forecast for 2008 to between 1.3 percent and 2 percent due to the deepening housing contraction and tight credit, and said risks of further setbacks are troubling."The possibility that house prices could decline more steeply than anticipated, further reducing households' wealth and access to credit, was perceived as a significant risk to the central outlook for economic growth and employment," the Fed said in its Summary of Economic Projections. "Several participants noted that the risks of a downturn in the economy were significant,'' according to minutes of the Fed's Jan. 9 and 21 conference calls and Jan. 29-30 meeting. ``Many participants were concerned that the drop in equity prices, coupled with the ongoing decline in house prices, implied reductions in household wealth that would likely damp consumer spending.''
Crude oil for March delivery rose 73 cents to finish at a new record closing high of $100.74 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $8 to end at $937.80 an ounce on the New York Mercantile Exchange.
Rick Klein and Sarah Amos: "Texas has a one-of-a-kind primary/caucus system, where two-thirds of the state's delegates will be awarded in the March 4 primary, while the remaining third will depend on the results of caucuses later that evening. Voters are permitted — and, in fact, are encouraged by campaigns — to attend both events. But Obama has demonstrated organizational strength in other caucus states, leaving him favored to emerge with the larger share of the 67 delegates at stake in the caucuses, regardless of what happens in the primary earlier in the day." Overall, Texas allocates 193 delegates.
Teddy Roosevelt: “The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first and love of soft living and the get-rich-quick theory of life.”
The consumer price index increased 0.4% in January, driven by 0.7% gains in both energy and food prices. But other prices were also higher. The core CPI, which excludes food and energy costs, was up 0.3% in January, the largest gain since June 2006.
George Ure: "The 3-month annualized CPI is now running 6.8!"
Construction on new U.S. homes posted a small gain in January, even as building permits continued a downward slide, the Commerce Department reported Wednesday. Housing starts rose 0.8% to a seasonally adjusted annual rate of 1.01 million, the most since November. In December, starts fell by a revised 14.8% to an annual rate of 1.00 million. Economists were expecting national housing starts to rise to a pace of 1.01 million. Building permits dropped by 3.0%, to a seasonally adjusted annual rate of 1.08 million, the lowest since November 1991.
Sharper Image Corp., the San Francisco retailer, said in a statement Wednesday that it had filed under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware. In addition, Lillian Vernon Corp. filed for bankruptcy,
KKR Financial Holdings has postponed repayment of billions of commercial paper and is holding talks with creditors, according to a published report in the Financial Times Wednesday.
ACA Capital Holdings Inc. entered into a third forbearance agreement with its structured credit and other similarly situated counterparties, the company said late Tuesday. The agreement will remain effective until April 23. Under the agreement, the counterparties will continue to waive all collateral posting requirements, termination rights and policy claims relating to the rating of ACA Financial Guaranty Corporation, ACA Capital's financial guaranty insurance subsidiary, under their respective transaction documents including any credit support annexes and similar agreements.
China's consumer prices in January surged 7.1% from a year earlier.
Microsoft has hired proxy-solicitation group Innisfree M&A to help oust Yahoo's 10-member board, all of whom are up for re-election this year.
It has until March 14 to nominate a slate of directors for Yahoo.
``There are those who would say that you have to be wary about inspiration because you might be disappointed,'' Obama said. ``They say Obama might make a good speech, but what is really going to make a difference is how you work our government. But I have to say that it is my central premise that the only way we will bring about real change in America is if we bring new people into the process.''
In early Wednesday trading natural gas traded at $9.10. Yesterday, two hedge funds folded. Shorting natural gas caused their demise. There will be others to follow.
Rob Hanna: "The market gapped up big today but couldn’t hold on to those gains as the S&P 500, Dow 30, and Nasdaq all finished in the red. Reading financial columns tonight you’ll be told that the inability of the market to hold on to its gains was a bad thing. The large black candlesticks are ugly. Market participants are selling into strength. All of which means there is likely more downside to come. But is any of it true?
I ran a study on the Nasdaq 100 tonight to find instances where the index gapped higher by 1% or more and then closed lower on the day. I wanted to see whether the negativity tended to carry through to the next day or next several days. Here’s what I found.
Going back to 1986, the NDX has had 52 occurrences where the market gapped up over 1% and then finished negative on the day. It closed higher the next day 54% of the time. The chance of the NDX being up on any day over the period was also 54%. Over the next 3 and 5 days the chances of the market being higher were 62% and 65% after a large failed gap up. The NDX has closed higher between 55.5% and 56.5% of the time over all 3 and 5 days periods since 1986. So looking out over three and five days the supposedly negative reversal actually seems to be a positive for the market."
Bain Capital Partners said Wednesday it withdrew its application for U.S. national security approval for its planned $2.2 billion acquisition of network-equipment maker 3Com. The parties remain committed to continuing discussions, it said. 3Com Corp. said it couldn't reach an agreement with a federal oversight panel on national security issues surrounding its proposed $2.2 billion buyout by a private-equity firm and Chinese telecommunications company.
Pfizer to acquire Encysive Pharma for $2.35 a share.
The dollar index was at 76.244, up from 76.043 late Tuesday.
Airbus said Wednesday it expects half as many orders for new planes in 2008 as it got last year after receiving record orders in recent years and amid slower global growth.
GMAC to lay off 930 employees.
The Federal Reserve said on Wednesday it had lowered its growth forecast for 2008 to between 1.3 percent and 2 percent due to the deepening housing contraction and tight credit, and said risks of further setbacks are troubling."The possibility that house prices could decline more steeply than anticipated, further reducing households' wealth and access to credit, was perceived as a significant risk to the central outlook for economic growth and employment," the Fed said in its Summary of Economic Projections. "Several participants noted that the risks of a downturn in the economy were significant,'' according to minutes of the Fed's Jan. 9 and 21 conference calls and Jan. 29-30 meeting. ``Many participants were concerned that the drop in equity prices, coupled with the ongoing decline in house prices, implied reductions in household wealth that would likely damp consumer spending.''
Crude oil for March delivery rose 73 cents to finish at a new record closing high of $100.74 a barrel on the New York Mercantile Exchange. Gold for April delivery rose $8 to end at $937.80 an ounce on the New York Mercantile Exchange.
Rick Klein and Sarah Amos: "Texas has a one-of-a-kind primary/caucus system, where two-thirds of the state's delegates will be awarded in the March 4 primary, while the remaining third will depend on the results of caucuses later that evening. Voters are permitted — and, in fact, are encouraged by campaigns — to attend both events. But Obama has demonstrated organizational strength in other caucus states, leaving him favored to emerge with the larger share of the 67 delegates at stake in the caucuses, regardless of what happens in the primary earlier in the day." Overall, Texas allocates 193 delegates.
Teddy Roosevelt: “The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first and love of soft living and the get-rich-quick theory of life.”
Tuesday, February 19, 2008
Crude Prices
2/20/08 Crude Prices
Credit Suisse suspended a number of traders in connection with a $2.85 billion over valuation of assets.
Oil, heating oil and gasoline prices spiked Tuesday as investors eyed the possibility that OPEC may cut production just ahead of the second quarter, when gasoline demand in the Northern Hemisphere usually becomes the central focus of the market. An explosion at a 70,000-barrel-a-day refinery in Texas may have also boosted prices. Crude oil for March delivery rose $2.75 at $98.25 a barrel on the New York Mercantile Exchange. March reformulated gasoline soared 10.52 cents, or over 4%, at $2.5990 a gallon. March heating oil surged 8.81 cents, or over 3%, at $2.7350 a gallon and March natural gas rallied 24 cents at $8.90 per million British thermal units.
Wal-Mart said net income in the quarter ended Jan. 31 rose to $4.096 billion, or $1.02 per share, compared to $3.94 billion, or 95 cents a share, a year earlier.
Microsoft is not privately haggling with Yahoo over the software maker's rejected $31-per-share buyout offer for the slumping Internet pioneer, Bill Gates said in an interview. "We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," the Microsoft chairman said Monday. "They should take a hard look at it."
In an escalation of its fight for Yahoo, Microsoft will authorize a proxy fight at the Internet company this week, people briefed on the matter told DealBook.
Dubai International Capital LLC plans to increase its holdings in China, India and Japan to more than $5 billion during the next three to five years while expanding funds under management to between $25 billion to $30 billion from $13 billion currently, Kyodo reported Tuesday, citing comments by Anand Krishnan, chief operating officer of the fund.
China's consumer price index climbed 7.1% in January, accelerating from a 6.5% rise in December, data released by the National Bureau of Statistics showed Tuesday.
John Hussman: "As we enter 2008, the excessive creation of risky debt is beginning – and I should emphasize only beginning – to produce writedowns and losses...Having observed the inflation pressures I had anticipated over the near term, we are now starting to observe the credit problems I had anticipated over the longer term. Probably the only “bright side” is that increasing credit difficulties can be expected to put downward pressure on inflation later this year. Periods of heightened credit concerns tend to increase the demand for government liabilities (e.g. currency and Treasury securities), which tends to lower monetary “velocity” enough to drive down the rate of inflation...
I continue to believe that there is substantial risk of audit delays and “qualified” opinions in the upcoming reports of financial companies. It is difficult to see how analysts and some financial news anchors can seriously be looking for the market to have “discounted the bad news” when companies are still at a loss to quantify their news at all. It is equally difficult to see how financials can “come clean” with their losses when those losses generally have not yet occurred because the major wave of mortgage resets that started in October probably only now beginning to produce delinquencies. It's impossible to know yet which mortgages and how much will end up in foreclosure.
Most likely, there is more turbulence to come."
Banks in the United States have been quietly borrowing "massive amounts" from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times. The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February.
Barclays Plc , Britain's third-biggest bank, raised its 2007 writedown on the value of risky assets to 1.6 billion pounds ($3.1 billion) but reported profits broadly in line with analysts' expectations.
According to the WSJ, Lehman Bros.is sitting on a big pile of commercial real-estate loans, and that market is deteriorating, potentially causing bigger-than-expected write-downs. In recent weeks, credit markets have worsened, and Lehman believes it is now facing a write-down in the $1.3 billion range.
The dollar remained under pressure in European trading Tuesday, dogged by worries about the path of the ongoing credit crisis and ideas China's central bank might soon raise interest rates to battle surging inflation. The U.S. dollar index fell to the 75.95 area.
According to the FT, Barack Obama on Monday made an aggressive pitch at Ohio’s blue-collar workers by proposing a “Patriot Employers” plan that would lower corporate taxes for companies that did not ship jobs overseas.The proposal, which came two weeks before the critical Ohio primary and just before on Tuesday’s nominating contest in Wisconsin, is the most radical any presidential candidate has put forward so far to mitigate the perceived effects of globalization on US manufacturing.
According to the NY Times, the 2008 Index of Silicon Valley — which this year was sponsored by Joint Venture: Silicon Valley Network, a public-private partnership, and the Silicon Valley Community Foundation, a nonprofit — found that from 2002 to 2006, middle-wage jobs fell to 46 percent of the work force, from 52 percent.
According to Bloomberg, Dubai Mercantile Exchange, a venture between the Dubai government, the Oman Investment Fund and Nymex Holdings Inc., plans to offer financially settled contracts for Brent and Oman crude oil. The new contracts enable investors to trade the difference between high and lower sulfur benchmark oil grades without taking physical delivery. Dubai Mercantile will end its Brent- Oman Financial Spread Contract and WTI-Oman Financial Spread Contract when trading in the new contracts start, the exchange said in an e-mailed statement today.
In early Tuesday trading, gold futures soared over 2% in a broad commodities rally Tuesday, as platinum surged 4% after hitting another record high of $2,174.0 an ounce in electronic trading. Gold for April delivery rose $20.20 at $926.30 an ounce on the New York Mercantile Exchange. April platinum rallied $76.30 at $2,140 an ounce on Nymex after hitting a new record high earlier in the session. March palladium rallied $36.30, or 6%, at $488 an ounce, March copper rose 13.20 cents, or 4%, at $3.6550 a pound, and March silver gained 31.20 cents, or 2%, at $17.430 an ounce.
Staples Inc. announced Tuesday a 2.5 billion euro ($3.7 billion) hostile offer for European office-supplies chain Corporate Express, asserting the Dutch company should accept its acquisition bid rather than wait for its own restructuring plan to go ahead.
Mike Shedlock: "What ails the economy is cash strapped consumers who have recklessly spent over the years, businesses that have over expanded, and government that keeps spending more money every year than it collects. And if ever there was a worse time to start a business than now, you would be hard pressed to find it."
Whole Foods Market Inc's first-quarter profit fell to $39.1 million, or 28 cents a share, from $53.8 million, or 38 cents a share, a year ago. Results for the latest quarter were 36 cents a share excluding the impact from the company's acquisition of Wild Oats.
Yahoo Inc. plans to offer all of its employees "enhanced severance benefits" if they are laid off following a sale of the company, according to a report Tuesday in the online edition of The Wall Street Journal.
For the first quarter, excluding charges and one-time items, H-P would have earned $2.3 billion, or 86 cents a share, to beat the estimates of analysts surveyed by Thomson Financial, who forecast the company to earn 81 cents a share on $27.6 billion in sales.
Crude-oil futures surged nearly 5% Tuesday to close above $100 a barrel for the first time ever.
April gold soared $23.70, or nearly 3%, at $929.80 an ounce on the New York Mercantile Exchange. April platinum rallied $89.40, or over 4%, at $2,153.10 an ounce. March palladium rallied $47.60, or over 10%, to finish at $499.30 an ounce.
The home builders' housing market index rose to 20 in February from 19 in January, the National Association of Home Builders reported Tuesday.
Credit Suisse suspended a number of traders in connection with a $2.85 billion over valuation of assets.
Oil, heating oil and gasoline prices spiked Tuesday as investors eyed the possibility that OPEC may cut production just ahead of the second quarter, when gasoline demand in the Northern Hemisphere usually becomes the central focus of the market. An explosion at a 70,000-barrel-a-day refinery in Texas may have also boosted prices. Crude oil for March delivery rose $2.75 at $98.25 a barrel on the New York Mercantile Exchange. March reformulated gasoline soared 10.52 cents, or over 4%, at $2.5990 a gallon. March heating oil surged 8.81 cents, or over 3%, at $2.7350 a gallon and March natural gas rallied 24 cents at $8.90 per million British thermal units.
Wal-Mart said net income in the quarter ended Jan. 31 rose to $4.096 billion, or $1.02 per share, compared to $3.94 billion, or 95 cents a share, a year earlier.
Microsoft is not privately haggling with Yahoo over the software maker's rejected $31-per-share buyout offer for the slumping Internet pioneer, Bill Gates said in an interview. "We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," the Microsoft chairman said Monday. "They should take a hard look at it."
In an escalation of its fight for Yahoo, Microsoft will authorize a proxy fight at the Internet company this week, people briefed on the matter told DealBook.
Dubai International Capital LLC plans to increase its holdings in China, India and Japan to more than $5 billion during the next three to five years while expanding funds under management to between $25 billion to $30 billion from $13 billion currently, Kyodo reported Tuesday, citing comments by Anand Krishnan, chief operating officer of the fund.
China's consumer price index climbed 7.1% in January, accelerating from a 6.5% rise in December, data released by the National Bureau of Statistics showed Tuesday.
John Hussman: "As we enter 2008, the excessive creation of risky debt is beginning – and I should emphasize only beginning – to produce writedowns and losses...Having observed the inflation pressures I had anticipated over the near term, we are now starting to observe the credit problems I had anticipated over the longer term. Probably the only “bright side” is that increasing credit difficulties can be expected to put downward pressure on inflation later this year. Periods of heightened credit concerns tend to increase the demand for government liabilities (e.g. currency and Treasury securities), which tends to lower monetary “velocity” enough to drive down the rate of inflation...
I continue to believe that there is substantial risk of audit delays and “qualified” opinions in the upcoming reports of financial companies. It is difficult to see how analysts and some financial news anchors can seriously be looking for the market to have “discounted the bad news” when companies are still at a loss to quantify their news at all. It is equally difficult to see how financials can “come clean” with their losses when those losses generally have not yet occurred because the major wave of mortgage resets that started in October probably only now beginning to produce delinquencies. It's impossible to know yet which mortgages and how much will end up in foreclosure.
Most likely, there is more turbulence to come."
Banks in the United States have been quietly borrowing "massive amounts" from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times. The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February.
Barclays Plc , Britain's third-biggest bank, raised its 2007 writedown on the value of risky assets to 1.6 billion pounds ($3.1 billion) but reported profits broadly in line with analysts' expectations.
According to the WSJ, Lehman Bros.is sitting on a big pile of commercial real-estate loans, and that market is deteriorating, potentially causing bigger-than-expected write-downs. In recent weeks, credit markets have worsened, and Lehman believes it is now facing a write-down in the $1.3 billion range.
The dollar remained under pressure in European trading Tuesday, dogged by worries about the path of the ongoing credit crisis and ideas China's central bank might soon raise interest rates to battle surging inflation. The U.S. dollar index fell to the 75.95 area.
According to the FT, Barack Obama on Monday made an aggressive pitch at Ohio’s blue-collar workers by proposing a “Patriot Employers” plan that would lower corporate taxes for companies that did not ship jobs overseas.The proposal, which came two weeks before the critical Ohio primary and just before on Tuesday’s nominating contest in Wisconsin, is the most radical any presidential candidate has put forward so far to mitigate the perceived effects of globalization on US manufacturing.
According to the NY Times, the 2008 Index of Silicon Valley — which this year was sponsored by Joint Venture: Silicon Valley Network, a public-private partnership, and the Silicon Valley Community Foundation, a nonprofit — found that from 2002 to 2006, middle-wage jobs fell to 46 percent of the work force, from 52 percent.
According to Bloomberg, Dubai Mercantile Exchange, a venture between the Dubai government, the Oman Investment Fund and Nymex Holdings Inc., plans to offer financially settled contracts for Brent and Oman crude oil. The new contracts enable investors to trade the difference between high and lower sulfur benchmark oil grades without taking physical delivery. Dubai Mercantile will end its Brent- Oman Financial Spread Contract and WTI-Oman Financial Spread Contract when trading in the new contracts start, the exchange said in an e-mailed statement today.
In early Tuesday trading, gold futures soared over 2% in a broad commodities rally Tuesday, as platinum surged 4% after hitting another record high of $2,174.0 an ounce in electronic trading. Gold for April delivery rose $20.20 at $926.30 an ounce on the New York Mercantile Exchange. April platinum rallied $76.30 at $2,140 an ounce on Nymex after hitting a new record high earlier in the session. March palladium rallied $36.30, or 6%, at $488 an ounce, March copper rose 13.20 cents, or 4%, at $3.6550 a pound, and March silver gained 31.20 cents, or 2%, at $17.430 an ounce.
Staples Inc. announced Tuesday a 2.5 billion euro ($3.7 billion) hostile offer for European office-supplies chain Corporate Express, asserting the Dutch company should accept its acquisition bid rather than wait for its own restructuring plan to go ahead.
Mike Shedlock: "What ails the economy is cash strapped consumers who have recklessly spent over the years, businesses that have over expanded, and government that keeps spending more money every year than it collects. And if ever there was a worse time to start a business than now, you would be hard pressed to find it."
Whole Foods Market Inc's first-quarter profit fell to $39.1 million, or 28 cents a share, from $53.8 million, or 38 cents a share, a year ago. Results for the latest quarter were 36 cents a share excluding the impact from the company's acquisition of Wild Oats.
Yahoo Inc. plans to offer all of its employees "enhanced severance benefits" if they are laid off following a sale of the company, according to a report Tuesday in the online edition of The Wall Street Journal.
For the first quarter, excluding charges and one-time items, H-P would have earned $2.3 billion, or 86 cents a share, to beat the estimates of analysts surveyed by Thomson Financial, who forecast the company to earn 81 cents a share on $27.6 billion in sales.
Crude-oil futures surged nearly 5% Tuesday to close above $100 a barrel for the first time ever.
April gold soared $23.70, or nearly 3%, at $929.80 an ounce on the New York Mercantile Exchange. April platinum rallied $89.40, or over 4%, at $2,153.10 an ounce. March palladium rallied $47.60, or over 10%, to finish at $499.30 an ounce.
The home builders' housing market index rose to 20 in February from 19 in January, the National Association of Home Builders reported Tuesday.
Monday, February 18, 2008
Nationalize
2/19/08 Nationalize
Over the weekend, Nippon Steel and Posco agreed to pay 65% more for iron ore supplied by Companhia Vale do Rio Doce in 2008, Dow Jones Newswires reported. Japan's four largest steelmakers have agreed to a 65% increase in iron ore prices from Brazilian mining company Vale do Rio Doce, setting a new global benchmark. The new contract price, marking the sixth straight yearly increase, will apply to the fiscal year beginning April 1.
Societe Generale, the French bank which has been hurt by a $7.1 billion loss from unauthorized trading, had its credit rating reduced to AA- from AA by Standard & Poor's.
Societe Generale has held preliminary discussion about a possible merger with La Banque Postale, according to a report in Les Echos newspaper Monday.
Northern Rock shares were suspended after the U.K. government said on Sunday that it intends to nationalize the embattled lender.
China's producer price index climbed 6.1% in January from a year earlier, the National Bureau of Statistics said Monday. The increase follows a 5.4% rise in December, and marks the sixth straight month the growth rate in the PPI index has increased.
Australia and New Zealand Banking Group Ltd. Monday warned of higher provisions for the current financial year, including a $200 million write-down on a derivative position related to an U.S. monoline insurer. The company said in a statement a "substantial portion" of the provision could be written back in future periods. The bank said the write-down is related to derivative positions it took between 2005 and February 2007, and follows the credit downgrade of a U.S. monocline insurer to "CCC". ANZ did not identify the monoline insurer.
The U.S. Department of Agriculture on Sunday ordered the recall of 143 million pounds of beef from a Southern California slaughterhouse that is the subject of an animal-abuse investigation.
China attracted $11.2 billion in foreign investment in January, up 109.8 percent from the same month last year, the government said Monday.
Satyajit Das: "2007 may come to associated with the start of the "big" credit crunch. 2008 has begun with a number of "unresolved" items. Hope of an early resolution seems to be fading. In the words of Lily Tomlin, the American comedian: "Things are going to get a lot worse before they are going to get worse."
Floyd Norris: "Overall, Americans are spending about 13 percent more on food and energy now than a year ago."
DataQuick Information Systems released figures showing that the median price of a new home in Orange County fell 6.2 percent in January from the year before – and 26 percent from December. New home sales last month fell 62.8 percent. The same is happening elsewhere in the region. Prices of new homes sold in Southern California fell 7.8 percent last month from the year before and 51 percent from December, while sales dropped nearly 47 percent, DataQuick reported.
Brett Steenbarger: "After a strong snap-back rally from the January lows, we're now seeing deterioration in the indicators. I will need to see improvements in the readings before taking the long side for anything other than a short-term trade."
According to the FT, prices for top-quality spring wheat have jumped by 90 per cent in the past month and a half, boosted by a scramble by corporate consumers to secure scarce grain and speculative buying by investors. A surge on Friday in prices for wheat used in bread to an all-time high of $19.88 a bushel – the highest yet paid for any wheat contract and a three-fold increase from a year ago – prompted the US baking industry to call for wheat exports to be curtailed.
According to Reuters, the government of Qatar has begun investing in Credit Suisse (CS) and the company's prime minister says that Middle East country is prepared to put up to $15 billion into US and European banks.
Year-to-date, the S&P500 is down 8.1%, and off 7.3% over the past 52 weeks.
"Senator Obama visited this morning with John and Elizabeth Edwards at their home in Chapel Hill to discuss the state of the campaign and the pressing issues facing American families," said Obama spokesman Bill Burton. He would not comment on the possibility of an endorsement.
Over the weekend, Nippon Steel and Posco agreed to pay 65% more for iron ore supplied by Companhia Vale do Rio Doce in 2008, Dow Jones Newswires reported. Japan's four largest steelmakers have agreed to a 65% increase in iron ore prices from Brazilian mining company Vale do Rio Doce, setting a new global benchmark. The new contract price, marking the sixth straight yearly increase, will apply to the fiscal year beginning April 1.
Societe Generale, the French bank which has been hurt by a $7.1 billion loss from unauthorized trading, had its credit rating reduced to AA- from AA by Standard & Poor's.
Societe Generale has held preliminary discussion about a possible merger with La Banque Postale, according to a report in Les Echos newspaper Monday.
Northern Rock shares were suspended after the U.K. government said on Sunday that it intends to nationalize the embattled lender.
China's producer price index climbed 6.1% in January from a year earlier, the National Bureau of Statistics said Monday. The increase follows a 5.4% rise in December, and marks the sixth straight month the growth rate in the PPI index has increased.
Australia and New Zealand Banking Group Ltd. Monday warned of higher provisions for the current financial year, including a $200 million write-down on a derivative position related to an U.S. monoline insurer. The company said in a statement a "substantial portion" of the provision could be written back in future periods. The bank said the write-down is related to derivative positions it took between 2005 and February 2007, and follows the credit downgrade of a U.S. monocline insurer to "CCC". ANZ did not identify the monoline insurer.
The U.S. Department of Agriculture on Sunday ordered the recall of 143 million pounds of beef from a Southern California slaughterhouse that is the subject of an animal-abuse investigation.
China attracted $11.2 billion in foreign investment in January, up 109.8 percent from the same month last year, the government said Monday.
Satyajit Das: "2007 may come to associated with the start of the "big" credit crunch. 2008 has begun with a number of "unresolved" items. Hope of an early resolution seems to be fading. In the words of Lily Tomlin, the American comedian: "Things are going to get a lot worse before they are going to get worse."
Floyd Norris: "Overall, Americans are spending about 13 percent more on food and energy now than a year ago."
DataQuick Information Systems released figures showing that the median price of a new home in Orange County fell 6.2 percent in January from the year before – and 26 percent from December. New home sales last month fell 62.8 percent. The same is happening elsewhere in the region. Prices of new homes sold in Southern California fell 7.8 percent last month from the year before and 51 percent from December, while sales dropped nearly 47 percent, DataQuick reported.
Brett Steenbarger: "After a strong snap-back rally from the January lows, we're now seeing deterioration in the indicators. I will need to see improvements in the readings before taking the long side for anything other than a short-term trade."
According to the FT, prices for top-quality spring wheat have jumped by 90 per cent in the past month and a half, boosted by a scramble by corporate consumers to secure scarce grain and speculative buying by investors. A surge on Friday in prices for wheat used in bread to an all-time high of $19.88 a bushel – the highest yet paid for any wheat contract and a three-fold increase from a year ago – prompted the US baking industry to call for wheat exports to be curtailed.
According to Reuters, the government of Qatar has begun investing in Credit Suisse (CS) and the company's prime minister says that Middle East country is prepared to put up to $15 billion into US and European banks.
Year-to-date, the S&P500 is down 8.1%, and off 7.3% over the past 52 weeks.
"Senator Obama visited this morning with John and Elizabeth Edwards at their home in Chapel Hill to discuss the state of the campaign and the pressing issues facing American families," said Obama spokesman Bill Burton. He would not comment on the possibility of an endorsement.
Sunday, February 17, 2008
Dislocations
2/17/08 Dislocations
According to the WSJ, Alibaba hired advisers to help it negotiate for expanded management independence in the event its U.S. partner, Yahoo, is acquired by Microsoft. The company is concerned about how China would view the merger.
Opposition to Nafta helped Obama win the backing of the SEIU, the politically powerful service-employees' union.
According to the FT, Delta Air Lines’ board plans to meet on Wednesday to approve the US carrier’s merger with rival Northwest Airlines, people close to the matter said on Friday.
"The auction-rate securities market is unwinding and most of the market will enter a failed state," said Alex Roever, fixed-income strategist at JPMorgan.
Doug Noland: "I definitely feel the economic ramifications of the unfolding Credit Crisis are receiving short shrift in the media. This week saw parts of the municipal debt market grind to a virtual halt and the corporate debt market take another significant blow. Investment grade debt issuance has now slowed markedly after beginning the year at near record pace. At this point, the junk, CDO, ABS, “private-label” MBS, muni, and even investment grade debt markets are all somewhere between impaired, dislocated and completely dysfunctional...Today, with bursting bubbles in corporate and municipal finance joining the mortgage bust, the U.S. Bubble economy has quickly fallen desperately short of sufficient Credit and liquidity. And the greater the Credit market dislocation and broad-based tightness of Credit, the bleaker become economic prospects and the more intense the Revulsion to Wall Street’s Credit instruments. The days of free-flowing cheap finance for home buyers, state and local governments, LBO firms, commercial real estate speculators, college students, risky auto buyers, and high-risk Credit card holders are over - and they will not be returning for some time to come. ..In a disconcerting development, recent market developments seem to confirm that the leveraged speculating community and the GSEs are poised as the next shoes to drop – the next Dominoes in an Escalating Contagion. Along with the “monolines” and mortgage insurers, the “Credit default swap market” and GSE mortgage Risk Intermediation were at the epicenter of the most egregious Systemic Risk Distortions and Accumulations. They are now quickly moving to the forefront of Current Acute Fragilities. Simplifying highly complex circumstances, the various risk models that empowered the greatest leveraging of risk in the history of finance no longer function as expected - or as required to maintain highly leveraged exposures to a multitude of escalating risks. And it was all just only a matter of time. The overriding flaw was to ignore that a runaway Bubble in market-based finance ensured that various market and Credit risks all coalesced into One Massive, Unmanageable, Highly Correlated, Unhedgable, Undiversifiable Association of Interrelated Systemic Risks. "
The yield on an index of 100 junk bonds tracked by KDP Investment Advisors hit a five-year high of 9.63% on Friday, up from 9.03% two weeks ago.
Borse Dubai said on Sunday it would consider selling a stake in the London Stock Exchange Group to Qatar, but had not received any approaches and was unlikely to sell any stake in the short term. Borse Dubai and the Nasdaq Stock Market should close a deal this month to buy Nordic and Baltic stock exchange OMX . Under the tie-up, Borse Dubai gets Nasdaq's stake in the London Stock Exchange (LSE).
Mike Burk: "The bottom indicators are suggesting there is little risk in the market. After a bottom has been made downside volume (DV) dries up pretty quickly. That has not happened yet, but it is encouraging to see DV falling off faster in the small cap indices than the large cap indices...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...The rally off the lows of January (early February for the OTC) has been less robust than I would like to see, but new lows suggest an intermediate term bottom is in place. I expect the major indices to be higher on Friday February 22 than they were on Friday February 15."
Robert McHugh: "This week, on Thursday, February 14th, Bernanke spoke, markets fell. Confidence in the Fed Chairman wanes. From a fundamental perspective, until something is done to bail out the credit insurers, so they maintain their AAA rating from Moodys and S&P, market rallies will be corrective. This is an economic nuclear bomb at 32,000 feet This is about bank solvency, bank risk-based capital, the bank credit function, not about the insurers themselves. Should a downgrade come to the insurers, billions of municipal bonds will effectively become illiquid, joining the trillion of CDOs (mostly subprime loan securities) that have already become illiquid. Without a bailout here, we are headed for a depression. "
New York’s regulator will hold talks this weekend with sovereign wealth funds, Warren Buffett and other investors in an effort to stabilise ratings on $220bn of municipal bonds guaranteed by FGIC .
According to the WSJ, Alibaba hired advisers to help it negotiate for expanded management independence in the event its U.S. partner, Yahoo, is acquired by Microsoft. The company is concerned about how China would view the merger.
Opposition to Nafta helped Obama win the backing of the SEIU, the politically powerful service-employees' union.
According to the FT, Delta Air Lines’ board plans to meet on Wednesday to approve the US carrier’s merger with rival Northwest Airlines, people close to the matter said on Friday.
"The auction-rate securities market is unwinding and most of the market will enter a failed state," said Alex Roever, fixed-income strategist at JPMorgan.
Doug Noland: "I definitely feel the economic ramifications of the unfolding Credit Crisis are receiving short shrift in the media. This week saw parts of the municipal debt market grind to a virtual halt and the corporate debt market take another significant blow. Investment grade debt issuance has now slowed markedly after beginning the year at near record pace. At this point, the junk, CDO, ABS, “private-label” MBS, muni, and even investment grade debt markets are all somewhere between impaired, dislocated and completely dysfunctional...Today, with bursting bubbles in corporate and municipal finance joining the mortgage bust, the U.S. Bubble economy has quickly fallen desperately short of sufficient Credit and liquidity. And the greater the Credit market dislocation and broad-based tightness of Credit, the bleaker become economic prospects and the more intense the Revulsion to Wall Street’s Credit instruments. The days of free-flowing cheap finance for home buyers, state and local governments, LBO firms, commercial real estate speculators, college students, risky auto buyers, and high-risk Credit card holders are over - and they will not be returning for some time to come. ..In a disconcerting development, recent market developments seem to confirm that the leveraged speculating community and the GSEs are poised as the next shoes to drop – the next Dominoes in an Escalating Contagion. Along with the “monolines” and mortgage insurers, the “Credit default swap market” and GSE mortgage Risk Intermediation were at the epicenter of the most egregious Systemic Risk Distortions and Accumulations. They are now quickly moving to the forefront of Current Acute Fragilities. Simplifying highly complex circumstances, the various risk models that empowered the greatest leveraging of risk in the history of finance no longer function as expected - or as required to maintain highly leveraged exposures to a multitude of escalating risks. And it was all just only a matter of time. The overriding flaw was to ignore that a runaway Bubble in market-based finance ensured that various market and Credit risks all coalesced into One Massive, Unmanageable, Highly Correlated, Unhedgable, Undiversifiable Association of Interrelated Systemic Risks. "
The yield on an index of 100 junk bonds tracked by KDP Investment Advisors hit a five-year high of 9.63% on Friday, up from 9.03% two weeks ago.
Borse Dubai said on Sunday it would consider selling a stake in the London Stock Exchange Group to Qatar, but had not received any approaches and was unlikely to sell any stake in the short term. Borse Dubai and the Nasdaq Stock Market should close a deal this month to buy Nordic and Baltic stock exchange OMX . Under the tie-up, Borse Dubai gets Nasdaq's stake in the London Stock Exchange (LSE).
Mike Burk: "The bottom indicators are suggesting there is little risk in the market. After a bottom has been made downside volume (DV) dries up pretty quickly. That has not happened yet, but it is encouraging to see DV falling off faster in the small cap indices than the large cap indices...The bad news is the extreme number of new lows in mid January implies another retest of the recent lows in the next few months...The rally off the lows of January (early February for the OTC) has been less robust than I would like to see, but new lows suggest an intermediate term bottom is in place. I expect the major indices to be higher on Friday February 22 than they were on Friday February 15."
Robert McHugh: "This week, on Thursday, February 14th, Bernanke spoke, markets fell. Confidence in the Fed Chairman wanes. From a fundamental perspective, until something is done to bail out the credit insurers, so they maintain their AAA rating from Moodys and S&P, market rallies will be corrective. This is an economic nuclear bomb at 32,000 feet This is about bank solvency, bank risk-based capital, the bank credit function, not about the insurers themselves. Should a downgrade come to the insurers, billions of municipal bonds will effectively become illiquid, joining the trillion of CDOs (mostly subprime loan securities) that have already become illiquid. Without a bailout here, we are headed for a depression. "
New York’s regulator will hold talks this weekend with sovereign wealth funds, Warren Buffett and other investors in an effort to stabilise ratings on $220bn of municipal bonds guaranteed by FGIC .
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